Mr King was addressing bankers at the Mansion House in London
The Governor of the Bank of England Mervyn King has called for simpler and more robust regulation of financial institutions.
Mr King told bankers in London that an "inability to perceive the true nature of the risks involved" had been at the heart of the financial crisis.
He said that international governments must commit now to long-term reforms, while the political will exists.
Mr King added that stabilising the banking system remained the priority.
In a speech to the Worshipful Company of International Bankers, Mr King said all forms of regulation - whether light or heavy touch - had "failed to some degree to prevent the accumulation of risks".
He said in future, regulators should maintain a clear focus on liquidity and leverage - the issues that matter most when problems arise.
Authorities must keep a check on the inter-connection of banks' activity, which had increased the risks of collapse, Mr King said.
"We need to build into the system some simple and robust impediments to excessive risk-taking," he told the audience at the Mansion House.
World leaders must take time to think carefully through the necessary reforms, Mr King stressed.
But he said: "We need to commit now, while the political will exists, to a process for decisions on long-term reforms in key areas such as bank regulation, reform of the international monetary system and the governance of international financial institutions.”
The Governor warned against using monetary policy as a means of controlling the financial sector's growth, saying it could increase unemployment and cause falling inflation.
"If we want to slow the growth of the financial sector balance sheet…we can surely do better than raising the Bank rate to a level that undermines the real economy,” he said.
'Lesson of history'
Instead, Mr King said, the authorities needed additional "counter-cyclical policy instruments" to control excessive expansion of the financial sector.
The main priorities for leaders at the forthcoming G20 summit should be restoring confidence, restructuring and recapitalising banks, he said.
There must then also be an "exit strategy" to allow governments to withdraw from their involvement in the sector to help the system return to stability.
But he warned: "A lesson of history is that few generations have been able to avoid a repetition of earlier banking crises.
"The essential problem is that we can no more bind our successors than our predecessors were able to bind us."
He said central banks must play a key role in helping institutions to retain a "collective memory" to prevent further crises.