James Moore: Only way forward is to pay the whistle-blowers

Outlook Part of the Parliamentary Commission on Banking's report dealt with whistle-blowers. We've seen Acts of Parliament, allegedly designed to assist them, and the report calls for their protection in banks to be made the responsibility of the group chairman. The trouble is, it won't work.

The history of whistle-blowing in this country suggests that it is they who will find themselves being brought to book rather than those responsible for the bad practice they seek to expose.

In taking action whistle-blowers put at risk not just their career progression but their very careers, and perhaps worse, given the backlash that will almost certainly emanate from those exposed.

The safer option is to turn a blind eye to what is going on, even if your employer requires that you highlight bad practice where you see it. Violating the departmental omerta is not an easy thing to do and, even if your job is protected, you might very soon find yourself taking redundancy because of the sheer unpleasantness of having to walk into a place where nobody talks to you day in, day out.

There is a way around this, of course. That is to pay the whistleblower. So far regulators have fought shy of taking this step, fearing moral hazard.

The spectre of making millionaires of those who expose malpractice, as has happened in the US, is an uncomfortable one. However, the best reassurance of protection is not the word of the chairman. It is that of financial recompense so the whistle-blower knows there is something to fall back on if it all goes wrong after they've opened the chicken coup.