"The good news is that the international community has made progress on the reform agenda," Lagarde said at a conference in central London.
"This is especially true for banking regulation under the auspices of the Basel Committee, where we are moving forward with stronger capital and liquidity requirements. This should make the system safer, sounder, and more service oriented.
"The bad news is that progress is still too slow, and the finish line is still too far off."
"Some of this arises from the sheer complexity of the task at hand. Yet, we must acknowledge that it also stems from fierce industry pushback, and from the fatigue that is bound to set in at this point in a long race."
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The IMF chief urged tougher regulation of the sector, and called for global agreement on a "framework" to allow "megabanks" to unwind "in an orderly way in case of failure".
"Ending too-big-to-fail must be a priority. That means tougher regulation and tighter supervision," she said.
"The behaviour of the financial sector has not changed fundamentally in a number of dimensions since the crisis," Lagarde said.
"While some changes in behaviour are taking place, these are not deep or broad enough.
"The industry still prizes short-term profit over long-term prudence, today's bonus over tomorrow's relationship."
Lagarde cited various scandals that have blighted the sector in recent years, and urged the adoption of stronger ethics.
"Some prominent firms have even been mired in scandals that violate the most basic ethical norms -- Libor and foreign exchange rigging, money laundering, illegal foreclosure," Lagarde said.
"We need a stronger and systematic ethical dimension.