In this post-crisis period, politicians in the United States are looking for scapegoats, said Stephen Roach, Chairman of Morgan Stanley Asia, referring to the Goldman Sachs fraud case.
"They want to point a finger, whether it is a Wall Street firm... (or) politicians pointing the finger at China on the currency," he said on CNBC Wednesday.
"There's a lot of systemic issues that deserve…a broader airing and a sense of shared responsibility, and unfortunately it is sort of missing in this process of introspection," Roach said.
He added that the Goldman Sachs fraud case has helped regulators push regulators "further down the road."
"Coming out of this crisis, we knew that the regulators were going to try and wrap their arms around a system that came close to catastrophic failure, that had to happen. It was just a question of when and what form."
Policy Solution vs. Regulatory Solution?
Roach added that policymakers must be aware of the sheer importance of monetary policy in steering the economy towards a recovery.
"We've had reckless monetary policies, and we still have them with zero percent interest rates for as far as the eye can see," he said.
"Until we address that aspect of the environment, I think we're doomed to repeat some of the same mistakes we've made in the past."
Roach concluded that in order to avoid history repeating itself, it is vital that policymakers shift their focus away from financial regulation and begin normalizing monetary policy.