Pay cuts should not be limited to Wall St--Warren

NEW YORK, Nov 6 (Reuters) - Reforms that remove short-term financial incentives from compensation packages should not be limited to the banking sector, a top U.S. government watchdog said on Friday.

Elizabeth Warren, who chairs a congressional oversight panel for TARP, the Treasury's $700 billion financial bailout program, told Reuters television that the problem of misaligned incentives was hardly restricted to finance.

"In my view, it's not just lower pay on Wall Street, there's a larger corporate governance issue at stake here," said Warren.

"People are rewarded for short term gains even that may produce long-term losses," she said. "That's not a compensation scheme that ultimately benefits either the individual companies or the country at large."

With this in mind, Warren said regulators should not be "singling out one industry or even one set of companies."

Influential Democratic Congressman Barney Frank said this week he would like Warren, a Harvard law professor to head a new agency to protect consumers from risky financial products. (Reporting by Fred Katayama; Writing by Pedro Nicolaci da Costa; Editing by Theodore d'Afflisio)