While Christine Lagarde, managing director of the International Monetary Fund (IMF), was in London last month, she heavily criticized the ‘fierce industry pushback’ that was manifesting itself in delays to financial sector reforms. This is not necessarily news to most who follow the developments in financial sector reform and regulation, but it is an important statement that needs to be reiterated. Ms. Lagarde’s sentiments were summed up by her statement that the, “… industry still prizes short-term profit over long-term prudence.”

This is often painfully true as exhibited by prominent attempts to slow or even inhibit the introduction of stricter rules and regulations in financial services. There have also been what seems to be an endless stream of front page cases of financial misconduct – from money laundering to the benchmark manipulation (for example, the manipulation of Libor).

Former Bank of Canada governor Mark Carney, currently serving as the governor of the Bank of England, echoed Ms. Lagarde’s sentiments along with many other policymakers and regulators.

Jamie Dimon, the current CEO of JPMorgan Chase, is one of the industry’s loudest voices when it comes to speaking out against tougher regulation. Some of his prime arguments are that, at the end of the day, customers would have to pay more for harsher regulation and that tougher rules are anti-American.

But that is not to say that all of those in the industry feel the same way as Mr. Dimon. There are those who consider, this writer included, a balanced regulatory approach to be absolutely crucial to not only the safety and soundness of the financial system but also to the stability of financial institutions. Progress has certainly been made with regards to capital, liquidity, and risk management, but there are certainly holes that need to be filled to properly safeguard the system. This is where a well thought out regulatory framework needs to be put into place. Such a framework would utilize a variety of enforcement mechanisms to ensure that new rules are actually adhered to rather than scoffed at. Another measure that desperately needs to be addressed is the notion that a financial institutions can be too big to fail (TBTF). These designations seemingly give select institutions a free pass that, even in the instance of non-compliance, they will not be allowed to fail as an organization.

Overall, it is clear that, despite industry pushback from key players, increased regulation is here to stay for the foreseeable future. Time will tell if policymakers and regulators find a balanced approach that gains traction and buy-in from the industry.