Unfinished financial reforms are holding back a recovery in key parts of the global economy, the head of the International Monetary Fund warned on Thursday.
In a speech in Toronto, IMF Managing Director Christine Lagarde urged world leaders to "do whatever it takes" to rebuild the world's financial system, which is still recovering from the 2007-09 financial crisis and has been further weakened by the euro zone debt crisis.
The financial crisis prompted a new order of financial regulation in every part of the financial system from over-the-counter derivatives to bank capital requirements.
But Lagarde said the global financial system was still not functioning well and there were powerful industry groups working against the implementation of the new rules.
"There are many vested interests working against change and push-back is intensifying," Lagarde told the Canadian International Council, according to prepared remarks.
"It is interesting how some banks say the new regulations will be too burdensome, but then spend hundreds of millions of dollars lobbying to kill them," she added.
Lagarde said progress was needed for financial institutions that are viewed as too big to fail and regulators should coordinate and align their rules.
"Most countries have committed to adopt some or all of the new regulations, and some have moved further ahead with their own national policies," she said. "The challenge now is to proceed to the end of the reform path all together."
(Reporting by Claire Sibonney and Jeffrey Hodgson; Writing by Lesley Wroughton; Editing by Mohammad Zargham)