The world is "waiting for the next crisis," according to John Kay, an economist and author.

That's because the global financial system is built on profits from trading, which is inherently unstable, argues the London School of Economics professor, the Financial Times reports.

The eurozone, he believes, is the likely site of the next crisis.

Declassified: ‘Financial War’ Could Wipe Out 50% of Your Wealth

Kay plans to outline his reasoning in a speech at the Russell Investments' annual pensions conference in London this week, according to the Times.

He points to the list of financial crisis that have taken place, such as the emerging market debt crisis in the mid- to late-1990s, the new economy bubble and the eurozone crisis.

"They're trading crises, fundamentally, and the system is geared around trading profits, which are, in large part, money that is borrowed from the future. A crisis results from the moment at which this money has to be paid back," Kay explains.

Less emphasis on trading profits would bring more stability to the financial system, says Kay, a columnist for the Times.

"I'm starting to query in my mind whether the role of public equity markets isn't just over, from the point of economic value. I don't see the need for them any more."

Yield-hungry investors repeatedly follow the market herd, a phenomenon that creates asset bubbles, he says. "Prices are driven to silly levels, but everyone makes a load of money in the meantime, and then you get a correction."

Regulatory changes may provide some protection, Kay explains. For instance, recent reforms in the United Kingdom, such as the division of banks' retail and investment operations, might protection depositors.

Despite some reforms in the UK, few changes have been implemented elsewhere, including the United States, Germany and France, according to Kay.

"Overall, I still remain gloomy about the outlook for the economy and the financial system."

In the United States, the so-called Volcker Rule, which is part of the Dodd-Frank financial reform in the U.S., requires banks to wall off speculative trading on their accounts into separate institutions, but still lets banks to do securities transactions for clients.

British reforms attempt to isolate all securities activity in banks.

Speaking at George Washington University, former Federal Reserve Chairman Paul Volcker complained that the rule bearing his name has yet to implemented three years after being signed into law as part of the Dodd-Frank Act, USA Today reports.

The delay is being caused by banks lobbying against the rule and a fragmented, slow-moving regulatory system, Volcker says, according to USA Today.

"It's a recipe for getting nothing done," he notes. "It really is a disaster."

Declassified: ‘Financial War’ Could Wipe Out 50% of Your Wealth