Those who exalt themselves will be humbled and those who humble themselves will be exalted.” To judge from reaction to last week’s reports on the collapse of HBOS and on Barclays’ culture, the conclusion of the Parable of the Pharisee and the Tax Collector should be carved into the portals of every banking boardroom as a warning to occupants.

The report of the Parliamentary Commission on Banking Standards on HBOS has led to high-level calls for sanctions against three of the bank’s most senior previous management. These individuals were culpable and they have apologised. But now those in authority must make an important distinction between proportionate punishment and vengeful retribution.

They will need to consider the context in which these business misjudgments occurred. The decade leading up to the banking crisis of 2007-08 seemed, at the time, like capitalism’s finest hour. A consensus emerged among shareholders, regulators and governments that business worked best if it was left to its own devices. This view had been prevalent in the US and became entrenched in the UK in the years either side of the millennium.

Shareholder value was elevated above other interests. Comfort was drawn from the security blanket that sophisticated new methods of distributing risk seemed to offer. The reason for this euphoria was that free-market capitalism seemed to be working – delivering steady growth and lifting all boats in a rising tide. The signals sent by three crucial groups drove the behaviour of bankers and other business people.

First, shareholders were drunk on growth. Hardly anyone questioned whether HBOS’s 17 per cent return on equity in 2001 or the 20 per cent it targeted by 2004 was dangerous. Banking chief executives who failed to live up to shareholders’ expectations were sacked or their businesses were taken over. Just ask Philip Purcell, ousted from Morgan Stanley in 2005, or the board of NatWest, taken over in 2000.

Second, Britain’s regulators were feted for their light touch. A study in 2007, commissioned by the mayor of New York, said: “For many executives, London has a better regulatory model: it is easier to conduct business there, there is a more open dialogue with practitioners and the market benefits from high-level, principles-based standards.” The Financial Services Authority was probably the first regulator in history to have been regarded as its economy’s accelerator rather than the brake.

Third, government joined the party. When Gordon Brown was UK chancellor of the exchequer, he told an audience of bankers: “What you have achieved for the financial services sector we, as a country, now aspire to achieve for the whole British economy.” His successor Alistair Darling followed Mr Brown’s lead. Senior members of other parties liked to be seen to consult bankers and appeared at banking events.

This was the context in which HBOS’s senior managers designed its strategy. Without understanding this context, their plans seem so incomprehensible as never likely to be repeated. When it is taken into account, it is clear there is a risk that such actions will recur the next time a consensus becomes dogma.

In that context, the second of last week’s banking reports, the Salz Review, commissioned by Barclays to study its culture and business practices, has much to offer. It was criticised for being fluffy but that is unfair. It lists 34 recommendations that have the potential to change the bank’s culture – the most important being the necessity of senior management being open to challenge. This means creating the right environment for feedback, to find room for members of the awkward squad and to question accepted wisdom constantly.

The Salz Review has given Barclays’ senior management a framework that might inoculate the bank against future dangerous consensuses; that bank’s challenge is to follow through. If it does, Barclays can justify the £17m it spent on the report. The parliamentary commission has yet to deliver its final report on banking standards; when it does its challenge will be to follow up last week’s forensic analysis of HBOS with some equally penetrating remedies. Only then will it have given the UK taxpayer full value for whatever money its deliberations have cost.