Former Federal Reserve Chairman Paul Volcker isn’t too happy with the White House’s proposal for financial regulation reform because it retains the “too big to fail” doctrine.

The Obama administration plans to subject “systemically important” financial firms to more stringent regulation by the Fed.

In testimony before Congress, Volcker pointed out that this idea implies the government will be prepared to bail out the firms in a crisis, encouraging even more risky behavior in a phenomenon known as “moral hazard.”

“Whether they say it or not, that carries the connotation in the market that they’re too big to fail,” said Volcker, chairman of the White House Economic Recovery Advisory Board, Bloomberg reports.

That could leave taxpayers footing the bill for Bear Stearns, Lehman Brothers, and AIGs.

“The danger is the spread of moral hazard could make the next crisis much bigger,” said the man credited with eradicating viral inflation in the early 1980s.

Volcker says the Fed should be at the top of the pyramid of agencies charged with preventing financial collapse.

He also called for stricter controls on commercial banks than the Obama administration has proposed, saying they should be barred from sponsoring hedge funds and private equity funds and forbidden to engage in proprietary trading.

Volcker isn’t the only expert worried about another financial crisis looming on the horizon. Hedge fund legend Julian Robertson told CNBC, “It's almost Armageddon if the Japanese and Chinese don't buy our debt.”