Michel Camdessus, IMF managing director, said: "Yes, we made errors. For instance, we did not take notice of information on short-term capital transactions soon enough."
He added: "Our member states simply did not have a genuine machinery of information before the crisis. We should have fought earlier for a supervision of the financial sector."
Mr Camdessus' comments came as the World Bank - whose policies have also come under fire - admitted there was a need for internal change.
Speaking at the launch of the Bank's annual report, a Bank representative said officials had for some time been aware of the need for reform, and had already started on a series of internal shake-ups. Proposals for overhauling the Bank and the IMF are expected to be discussed at length at the forthcoming annual meetings of the two institutions.
In its annual report, the Bank - which last year made record loan commitments of more than $20bn - stressed the human cost of the crisis.
European equity markets closed higher yesterday, on hopes of an early easing in US interest rates. Analysts speculated that a cut could come as soon as next Tuesday, when the Federal Reserve will meet for its regular rate-setting meeting.
The FTSE 100 rose for the second day, closing up 111.4 points at 5214.7. At lunchtime in New York, the Dow Jones was up 116.12 points at 8013.32.
World stock markets tumbled last week after Alan Greenspan, chairman of the Federal Reserve, appeared to rule out a co-ordinated cut in global interest rates.
However, there are still hopes of a cut in US rates and markets were waiting anxiously for hints of Mr Greenspan's next move as he spoke last night to the US Congress about the turmoil in world markets.
Nick Stamenkovic, chief European economist at Bank Austria Credit Anstalt Futures, said: "Tuesday's meeting will be a close call. Greenspan is an internationalist, and could persuade other FOMC [the committee that determines US rates] members to cut."
Oil prices were also spurred yesterday on talk of an emergency summit of oil industry leaders in Italy next week. November Brent crude hit an intra-day high of $14.73, but fell back after oil companies played down the talk, saying the forthcoming meeting was an "unexceptional" exchange of industry views.