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Fed looking at ways for longer pay deferrals at banks: Powell

A tour bus passes the United States Federal Reserve Board building (rear) in Washington October 28, 2014. REUTERS/Gary Cameron

WASHINGTON (Reuters) - The Federal Reserve is looking at ways to encourage banks to implement proper pay incentives to avoid some of the bad behavior the industry has displayed over the last several years, a top Fed official said on Tuesday.

Regulatory agencies are looking at ways to require longer pay deferrals and other forms of pay forfeiture and claw backs, Fed Governor Jerome Powell said at a Brookings Institution event.

"The real problem is the ability to generate short-term profits" with a long tail of risk, Powell said.

(Reporting by Michael Flaherty)