The banking industry must exercise self-restraint if it is to avoid coming under increasing fire over pay as global unemployment levels spike, said Philipp Hildebrand, vice-chairman of the Swiss National Bank, according to Reuters.

Speaking at a meeting of the Institute of International Finance on Friday, Mr Hildebrand reportedly warned that executives who did not exercise restraint on pay ran the risk of prompting intrusive legislation, especially in countries where tax-payer funded banking bailouts have been necessary.

"This issue will become very difficult in the months to come. If you don't exercise self-restraint on issues including pay, countries will have to react," Mr Hildebrand is quoted as having said.

Mr Hildebrand also highlighted four other regulatory priorities for the global banking sector going forward. Firstly, he said the need to reach a common definition of core capital was of “paramount” concern, and secondly, increased liquidity requirements must be agreed which do not create an uneven international playing field.

The third priority identified by Mr Hildebrand was that of financial institutions deemed “too big to fail”; finally, a framework for macro-prudential supervision must be drawn up, he said.

Mr Hildebrand has been outspoken in his views on remuneration in the banking industry, and in April he said that regulators must take action against institutions whose compensation structures may fuel excessive risk-taking.

Speaking at the SNB’s Economic Outlook 2009 conference, Mr Hildebrand said although many banks have overhauled their bonus systems, self-regulation is not enough and general standards need to be enforced

"The standards [on remuneration] need teeth… It is important that regulators ensure the implementation and take sanctions in cases of lacking or insufficient implementation," he said.