In the two months since taking the helm of the International Monetary Fund, Christine Lagarde has shaken up the staid old boys club with a distinctive leadership style that includes telling some uncomfortable truths about the state of the world economy.

At the annual meeting of the IMF and the World Bank in Washington (September 23-25), where Europe’s debt crisis dominated discussions, she openly declared that European banks face soaring sovereign debt and that they must recapitalize. The call may have angered her fellow Europeans but it also forced them to confront what many had already begun whispering in private.

Lagarde told the gathering of world finance ministers that the pace of growth in the global economy was faltering and, according to the IMF, will "slow to 4 percent this year and next."

US Treasury Secretary Timothy Geithner also put strong pressure on Europe’s leaders at the Washington gathering, recommending concrete ways they could rescue their banks.  But observers said it was Lagarde’s candid and pragmatic style in public and behind the scenes that helped the push for more decisive action.

As uncomfortable as her recommendations may be for European finance ministers and bankers who still see Europe's problems largely as domestic, some efforts have begun to stabilize the eurozone and to recapitalize banks by increasing the European Financial Stability Facility (EFSF).

Lagarde also called for a monetary policy that keeps liquidity in financial markets and strengthens banks, "so that they can lend to fuel growth and adequately face uncertain times with confidence." In addition, she called for stronger financial regulation to make financial crises and corresponding taxpayer bailouts less likely.

The demands for stronger action from European leaders were echoed by emerging markets including Brazil and China. In previous comments, Lagarde had encouraged emerging-market countries interested in buying European government debt to focus on nations that have difficulty borrowing - not just those with strong fiscal policies like Germany.