Reuters In the two months since taking the helm of the International Monetary Fund (IMF), Christine Lagarde has made two bold decisions. In a swift one-two punch, she confronted both European bankers and the region's political leaders, demanding more aggressive action to prevent the euro-zone debt crisis from spilling beyond Greece, Portugal and Ireland. She declared publicly that European banks faced huge exposure to souring sovereign debts and needed more capital, which angered Europe's leadership, but also forced them to confront what had only been whispered in private. Lagarde also blamed the politicians for creating a “dangerous new phase” in the global recovery by their bickering over budget deficits and their indecision over how to stem the crisis. “This vicious cycle is gaining momentum and, frankly, it has been exacerbated by policy indecision and political dysfunction,” she bluntly stated in a speech at the US Federal Reserve's annual Jackson Hole conference in August. Her frankness in speaking uncomfortable truths is putting a distinct stamp on her leadership. IMF insiders, speaking through a weekend of talks among global finance officials, said Lagarde's candor and clarity are no different in private meetings with government ministers. It is proving important in forcing officials to move faster in finding solutions at a critical turning point for Europe and the world economy. “There is definitely a big change of style,” one IMF official said. “Lagarde is great at appeasement, smoothing over conflicts ... calming tempers.” This contrasts sharply with her predecessor Dominique Strauss-Kahn, who resigned suddenly on May 18 after he was charged with sexually assaulting a hotel maid in New York. Persuasive and charismatic in private, Strauss-Kahn was verbose and opaque in public. His grasp of economic issues was immense but his style was one of a political operator, pulling strings within the complex international machinery to push his own objectives. The 55-year-old Lagarde's contrasting approach was bearing fruit by the end of the IMF and World Bank meetings in Washington this weekend. While many European finance ministers and central bankers may still see Europe's problems largely as a domestic issue, they have stepped up their efforts to find ways of stabilizing the euro zone and recapitalizing its banks. “The IMF through its (Global Financial Stability Report) and discussions helped prepare the ground and put pressure on Europeans by highlighting the trade-offs of policy measures and action,” said Domenico Lombardi, a former IMF board official who is now a senior fellow at the Brookings Institution in Washington. While Lombardi believes US Treasury Secretary Timothy Geithner is the weekend's winner for keeping up pressure on Europe by recommending ways to rescue their banks, he said Lagarde was able to build on that to push for decisive action. __