Mr Balls said regulation had "clearly" been strengthened by Labour
Cabinet minister Ed Balls has admitted the government "underestimated" the risks to the economy from not having stronger regulation of the City.
He said the regime in place had not been "tough enough", but added that it was "not about apologies".
Mr Balls, a former economic adviser to Gordon Brown, told the BBC they had strengthened regulation - moves opposed in the City and by the Conservatives.
The Tories are demanding that the prime minister apologises for the recession.
The party has launched a satirical website - sorryfromgordon.com - allowing members of the public to draft an apology as if written by the prime minister, which can then be forwarded.
Earlier this week Chancellor Alistair Darling suggested the government should show "humility" and accept "collective responsibility" for the economic crisis.
On his visit to the US earlier this week, Mr Brown said he agreed, but he added that "the idea... that somehow this is a British problem that was a British government mistake, actually what happened is that round the world, as everybody understands, the whole global financial system seized up".
In his speech to Congress on Wednesday, the prime minister called for globally agreed "rules and standards for accountability, transparency and reward" in banking.
In his BBC interview Mr Balls, the children's secretary, said: "This is not about apologies. This is saying very clearly we strengthened regulation in our country in the last 10 years.
"We set up the Financial Services Authority, legislated against Conservative opposition to have stronger regulation.
"I look back and I'm happy to say it wasn't tough enough... The truth is regulation wasn't tough enough.
"We underestimated some of those risks but don't forget that every time we were doing this, we were opposed by not just many City figures but also the Conservative opposition who said we were being too tough, too heavy-handed and who wanted less regulation."
Mr Balls added: "So I don't apologise at all for being tough on regulation, nor does the prime minister.
"We weren't tough enough and we've got to get that sorted out for the future but I don't think I would trust the people who said we were too heavy-handed.
"So let's have a proper view of the past and let's also move forward and get things sorted out so we can get the economy moving."
Mr Balls also said: "We've all said that and we all know that for the future we need tougher regulation - not just on bonuses but on any place where banks are taking risks which could destabilise our economy."
Last month Mr Balls said the global recession was "the most serious for over 100 years".
Mr Brown hosts a summit of the Group of 20 (G20) developed and emerging economies in London on 2 April.