"YOU old radical, you!", Baroness Kennedy whispered to Dr Peter Selby, a former bishop of Worcester, under the dome of St Paul's Cathedral last week.

Lady Kennedy and Dr Selby were among the panellists gathered to debate "What kind of City do we want?" on Thursday evening, in an event organised by St Paul's Institute and CCLA, the charity fund-manager. They were joined by the Archbishop of Westminster, the Most Revd Vincent Nichols, and Tracey McDermott, director of enforcement and financial crime at the Financial Conduct Authority, but the two veterans of the House of Lords (Lady Kennedy confessed that she used to try to sit near to Dr Selby) soon found common ground in their diagnosis of unethical behaviour in the City of London, and in wider society.

Dr Selby called for churches to become "schools of resistance", where people could be "trained to say 'no' and 'enough is enough'. Lady Kennedy, a Queen's Counsel specialising in human rights, was afraid that ethical standards had been "squeezed out". "It's about the way in which we have made wealth a value, and we measure people in our society increasingly because of what they have. That has been a poison within our system."

The keynote address, delivered by Archbishop Nichols, was more measured. The Occupy protests had raised "searching questions", but, while it would be "easy to paint a depressing picture of the City", he was "not here this evening to announce that we are all doomed. . . The Christian instinct is to see potential for good in the City."

The answer to the debate's question, he suggested, was rooted in recognising the common bonds that held the City's inhabitants together. He was reluctant to single out those working in financial services for criticism, arguing that: "We are all secretly tempted to do good. But our desire for good can easily be distorted through selfishness, greed and pride."

The solution, he suggested, was to develop the virtues of prudence, justice, courage, and temperance. Rules would not suffice, because they tended to become "a lazy proxy for morality. People think that if it is not against a rule, then it is OK."

This last contention was picked up by Mrs McDermott, who suggested that "effective regulation and tough enforcement of the law are necessary, but not sufficient". Although the industry "only has itself to blame" for the perception held by many that it could not be trusted, "most people who work in financial services are decent, hardworking, honest people."

Archbishop Nichols's optimism was challenged by Dr Selby, who argued that "the problem is that the struggle between good and evil in some people carries an awful lot more weight on the lives of others."

Lady Kennedy took up the baton of radicalism with her contention that: "We should be looking at the whole way in which capitalism is working. . . We have to say again, 'What is good?'"

She revealed that when asked recently what she wanted, she had replied: "I want to be good" - an answer that had elicited laughter.