There used to be a reliable pecking order of professions that were held in public disregard. Bankers attracted little sympathy but retained a certain mystique. Politicians and journalists were still less respected. Estate agents came beneath the lot. The past few weeks have overturned the rankings. No group attracts greater derision and outrage than profligate banking executives.

As the Government takes majority stakes in the banking system, top bankers - first Sir Fred Goodwin, at the Royal Bank of Scotland, but certainly more to follow - step down as the price of the survival of their own institutions. They failed to understand the risks of their own business; they are in line for large payoffs as the reward for failure; and their institutions now seek taxpayers' money to rebuild their depleted balance sheets. “Time to put greedy bankers in stocks,” screamed one recent tabloid headline.

The sentiment is transatlantic. “This is a pain that will stay with me for the rest of my life,” pleaded Richard Fuld, the chairman and chief executive of failed investment bank Lehman Brothers last week. His performance before a congressional committee was more eloquent than the monosyllabic grunts for which he was famous in business and that had earned him the nickname “the Gorilla”. But it failed to move his critics. A man who acknowledged earning $350 million between 2000 and 2007, at a bank whose future he might have saved yet that he stubbornly drove to bankruptcy, was always to going to find public sympathy a scarce commodity.

Fuld's fall has been brutally rapid. Last April he imprudently predicted that the worst of the crisis had passed. He is now castigated as a figure of venality, cupidity and incompetence - the “super-rich banker whose greedy bungling will send our mortgage bills spiralling”, according to another British tabloid. The exasperated incomprehension was summed up, in more measured fashion, by the congressional committee chairman: “You don't seem to acknowledge that you did anything wrong.”

So is it right to hate the bankers? They are the obvious target. And in many respects they deserve it. There have been scandalous recent cases of dishonesty. (A group of traders at Crédit Suisse were found earlier this year to have deliberately covered up losses to protect their bonuses.) Bankers have utterly failed to understand the business of raising capital. And there is something stomach-wrenching about bankers engaging in reckless behaviour, without bearing the costs of failure, while confident in the knowledge that as a sector - though not, as Fuld discovered, in every case - they will be bailed out by government and central banks.

A defender of the City is hard to find. For some years I was part of the senior management of a pan-European investment bank. I spent much time at banking conferences and elsewhere, expounding the merits of universal banks that could provide customers with capital market products - a view I firmly hold. And among politicians, Boris Johnson, the Mayor of London, is rare in extolling “the huge benefits brought to this country by bankers and the City”.

Bashing the bankers is so uncontroversial a stance that even the Church of England has abandoned the ambiguities it usually reserves for its social commentaries. The Archbishop of Canterbury refers scathingly to “paper transactions with no concrete outcome beyond profit for traders”. The Archbishop of York, apparently confusing the messengers of bad news (hedge funds that sell banking stocks short) with the bankers whose strategies have destroyed wealth, inveighs against “asset strippers and bank robbers”.

But there is a disturbing undercurrent to the hostility to bankers. The sentiment long predates today's financial bust. Aversion to commerce is part of our history and culture. The Romantic movement lamented the despoliation of spiritual values by the business of, as Wordsworth put it, getting and spending. The workers' movement condemned the accumulation of wealth that also produced, in Marx's words, “accumulation of misery, the torment of labour, slavery, ignorance, brutalisation and moral degradation”. Yet the image of the financial predator is more potent still. The industrialist, after all, makes something tangible, and the entrepreneur takes risks. There is no widespread public outcry against the personal wealth and business expansion of the Mittal steel dynasty, Bill Gates or Sir Richard Branson.

The moneylenders, on the other hand, are regarded as parasitic even in a culture that celebrates commercial success. There are good reasons that bankers attract opprobrium in today's credit crisis. But it is important to separate those reasons from an uglier strain of thinking that has poisoned history and made cultured men deranged. The character of the moneylender is entrenched in the most important works of English literature. In the King James Bible, Matthew's Gospel relates that Jesus “went into the temple of God, and cast out all them that sold and bought in the temple, and overthrew the tables of the moneychangers.” When Shakespeare depicted the villainy of the moneylender Shylock in The Merchant of Venice, he dwelt on two traits. Shylock was a Jew and a usurer: he lent money at interest. Shylock's rival Antonio, by contrast, “oft delivered from his forfeitures many that have at times made moan to me”. In effect, Antonio was taking the role of the central banker. He was the lender of last resort to those who could not meet their liabilities. And by lending without interest, to Shylock's disgust, Antonio “brings down the rate of usance here with us in Venice”.

The notion that those who lend money are exploitative in charging interest is deep rooted. Religious objections to usury have given rise even to a specialist business among some Western investment banks in providing financial services that conform to Islamic law. But the development of a global economy depended on the rise of the moneylenders. The Protestant work ethic superseded the biblical injunction to eschew riches. John Wesley preached on “The Use of Money”, in which he urged the faithful to “gain all we can without hurting our neighbour”. Jews historically had the professions barred to them, and naturally turned to banking and trade. Hostility to financiers was thus buttressed by more repulsive prejudices.

Modern banking is associated with one name above all. The house of Rothschild was founded in Frankfurt by Mayer Amschel Rothschild (1743-1812). Through five scions of the founder, the name of Rothschild expanded across Europe. It reached its zenith under the leadership of Nathan Rothschild, who was born in 1840 and died in 1915, as the promise of the first great wave of globalisation was buried in the carnage of the Great War.

Nathan Rothschild promoted three great causes: international finance, free trade and the gold standard as the guarantor of sound money. In the banking crises of that time, Rothschild acted to stabilise the financial system, much as central banks are trying to do now. When Baring Brothers was bankrupted by a default on Argentine debt, Rothschild rescued the bank to stabilise the financial system. The sheer scope of the Rothschilds' activities, which spanned national borders, sparked fierce political opposition. Among the most influential of 19th-century men of letters, Thomas Carlyle was reduced in his old age to standing outside the house of Nathan Rothschild, muttering imprecations. J.A. Hobson, the Liberal economist, still much-cited by modern Lib Dems, declared in 1902 that if the house of Rothschild were to oppose war, then no government could withstand it. This was a nice combination of populist beliefs - in the power of finance as against national governments and in the warmongering tendencies of big business.

Across the Atlantic, the unaccountable power of bankers became a staple of populist campaigning too. The bankers insisted that the dollar needed to be backed by gold for the US to retain financial credibility. Against them, the three-times Democratic presidential nominee William Jennings Bryan denounced the gold standard for its deflationary effect on the incomes of farmers. “You shall not,” he said, “crucify mankind upon a cross of gold.”

Yet the bankers - notably J.P. Morgan - were crucial to resolving the crisis of 1907, brought on by the failure of the Knickerbocker Trust Company. That threat to the banking system led to the creation of the Federal Reserve Board in 1913. Ironically, the central bankers proved to be far less prescient than the commercial bankers had been. Bankers were widely assumed to be the villains of the most severe financial crisis of the last century, the crash of 1929 and the Great Depression that followed. Charles E. Mitchell, the chairman of National City Bank, was hauled before the US Senate Subcommittee on Banking and Currency in 1933 to answer allegations of stock manipulation. Similar accusations were made against Albert H. Wiggin, the president of Chase National Bank. In Britain, the most striking financial scandal of the time was the collapse of the banking empire of Clarence Hatry, who was alleged to have forged share certificates that were used as collateral for loans.

There is no question but that the stock market crash exposed some highly dubious and dishonest business practices. But the damage to the real economy was more a result of bad policy than financial malpractice. The White House and the Federal Reserve were determined to stamp out what President Hoover later described as the “orgy of speculation”. To that end, monetary policy was tightened in the 1930s - the opposite of policy adopted after the 1987 stock market crash, when central banks slashed interest rates and flooded the financial system with liquidity. In 1987, at least, the policy worked: recession was averted. In the 1930s, monetary policy ensured that recession turned into something far worse - and the image of greedy bankers was entrenched in collective folklore.

Financiers brought low by avarice are a recurring part of the financial landscape. The secondary banking crisis in 1973-74, when many small banks failed as a result of a collapse in property prices, exposed a culture of unsound lending and speculation as intense as today's. In the 1980s, the principal public villains were the arbitrageur Ivan Boesky, who was disgraced after he was shown to have been in receipt of inside information, and the junk-bond salesman. Michael Milken, who was jailed for securities fraud.

But the financial crisis now is different. Regulators are dealing not with small institutions and individual miscreants, but with a systemic failure. There is always a risk of contagion in the banking sector because banks are linked to each other through the wholesale lending market. Banks borrow short-term, from each other, and lend long-term, in loans and mortgages. The collapse of one bank will lead - and has led - to a position where banks will not lend to each other, except at punitive interest rates, for fear of not getting the money bank. The liberalisation of the financial system, which has worked huge benefits in lifting millions of people out of poverty, is oddly vulnerable to a contagion of bad debts. Modern banks are now too big to fail - and this is driving the public mood.

Public opinion may not grasp the jargon of financial markets, but it does express reasonable incredulity that top bankers have operated in a market where their own rewards are protected. In fact, “market” is the wrong word. Boardroom pay has been set not by market forces but by committees, on the advice of consultants who may even be appointed by the executives whose pay is being decided. It is, in the phrase of the celebrated economist J.K. Galbraith, “in the nature of a warm personal gesture by the individual to himself”.

The bankers have, in short, played an essential role in the development of modern market economies. Hostility to financiers has an inglorious history encompassing anti-intellectualism, anti-Semitism and conspiracy theory. The stresses in the financial markets partly reflect bad policy decisions that made sense at the time - such as central banks keeping interest rates low after 9/11, and owing to the effect of Chinese imports in restraining inflation. But this time, there is a justifiable anger at the insouciance of the bankers, who irresponsibly exploited those decisions. The demonology has new life in it.