The financial sector should seek to develop industry-wide guidelines for compensation that would better align individual incentives with the long-term interests of the firms they work for, a Federal Reserve governor said on Monday.

Randall Kroszner’s remarks, in a speech in New York, highlight the extent to which policymakers believe perverse incentives helped to foster excessive risk-taking in the run-up to the credit crisis – and see the need for changes to banks’ compensation systems.