A Church of England report published on Monday warns that the morality of City bankers and traders has worsened since the Big Bang 25 years ago and many financial institutions' gestures towards corporate social responsibility are little more than public relations and spin.

Publication of the report by the St Paul's Institute thinktank was originally intended to coincide with the deregulation anniversary a fortnight ago but was postponed because of the turmoil surrounding clergy at the cathedral over the Occupy the Stock Exchange tent protest.

In his introduction to the report, the Rev Giles Fraser, who resigned as canon chancellor 10 days ago in opposition to the cathedral's threat to evict the protesters, warns ethical standards have deteriorated now traders and bankers no longer deal with clients face to face and transactions are computer-based, so personal links and responsibilities are lost.

He accuses City firms of supporting photogenic "kids and orchestras" charities as ways of winning favourable publicity.

In a lecture on Sunday at BBC Radio 3's Free Thinking Festival in Gateshead, to be broadcast the following night, Fraser said individualism in Britain has gone too far, causing people to lose all sense of belonging to the wider community.

The lecture, partly written before the St Paul's crisis and not directly addressing it, says: "The paradox of freedom is that those who struggle for the unencumbered life, those who seek only to be free of any sort of constraint can readily end up living with an empty freedom that narrows one's life to a succession of individual choices which actually feel anything but free.

"Our individualistic culture has gone too far ... We need to recall where we have come from and not fall for the foolish false wisdom that we can simply reinvent ourselves through some superhuman act of choice. We need to value and nurture those communities that sustain us morally.

The St Paul's Institute's report, commissioned in the summer and completed before the protest erupted, used market research company ComRes to question 500 bankers and other financial sector workers about the ethics of business practices in the City. It found a substantial number accepting they are overpaid compared with professions such as teachers and nurses, though not in comparison with lawyers. Most could not recall the Latin motto of the City of London: Dictum Meum Pactum: My Word is My Bond.

The findings show that Ken Costa, the former chairman of Lazards International, appointed last week by the Rt Rev Richard Chartres, bishop of London, to lead a dialogue between the City and the Church of England on ethical capitalism, may have his work cut out as only a third of those questioned said they believed in God, about half the proportion in the country as a whole. In an article in the Sunday Telegraph, Costa, himself a practising Anglican, said maximising shareholder returns should no longer be the sole criterion for judging how companies are run.

Writing in the Observer, Ed Miliband said the protests reflected a crisis of concern for millions of people and represented a wake-up call for politicians, promising that Labour would rise to the challenge they posed.

He described the Occupy London protest and others around the world as "danger signals" that only the "most reckless will ignore".

He said: "The challenge is that they reflect a crisis of concern for millions of people about the biggest issue of our time: the gap between their values and the way our country is run".