IT IS now some five years since the bursting of the dot-com bubble. As symbolised by the recent return of London’s FTSE 100 index to above the watershed 5,000, the markets are at last reviving from the devastation that the collapse caused to investor wealth.

However, although shares are on the rise once more, the same cannot be said of the confidence of millions of investors, nor of the public at large, in the broader financial system on both sides of the Atlantic.

In the years that followed the dot-com debacle, the public’s faith in financial markets and their participants was shaken to its foundations, not merely by the tech-stock bubble and its collapse, but by the startling series of financial scandals that followed.

From Enron and WorldCom in the US to Europe’s Parmalat, trust in corporate management has been tested to breaking point. When we are no longer sure, even of the likes of Shell and other paragons of corporate virtue, what confidence can be left? Here in Britain, the trust of thousands of ordinary savers has, meanwhile, been sapped by the home-grown imbroglios over endowment mis-selling and split-capital investment trusts, not to mention a number of lesser affairs that have bedevilled UK investors.

All of this has been profoundly damaging to the standing of the institutions and people upon whom we depend to generate wealth and protect our financial security.

For many, the image of the boardrooms and dealing rooms has never been worse. Sharp suits now merely suggest sharper practice.

How much does this generalised and deepening loss of faith matter? A lot. There are many complex factors behind what we have come to know in Britain as the “pensions crisis”. But a straightforward and basic factor is that people are failing to save enough for their old age because they have little or no trust in the means available for them to do so. It is not too hard to work out that the consequences will be severe.

It matters, too, that some of the closest and best-informed observers of the tech-stock implosion are giving warning that, in spite of those events, some may still have failed to learn that there is no such thing as a free lunch.

In a recent article, Frank Partnoy, professor of law at the University of San Diego and the author of an influential study of the dot-com debacle, Infectious Greed: How Deceit and Risk Corrupted the Financial Markets, argued that “perhaps it is 1999 again”.

Professor Partnoy wondered aloud about the recent resurgence in US stocks such as Google and Yahoo, and the factors behind the high ratings they enjoy from some of Wall Street’s biggest institutions.

The time may be ripe, therefore, to consider seriously the case for investing in our financial markets with a new, stronger, moral dimension.

To some, this will seem an odd proposition. There is a persistent and widespread belief that money and morality are awkward bedfellows. And yet the current context makes it apparent that the time must have arrived for a rethink of these antediluvian attitudes.

In a recent fascinating lecture at Gresham College, Avinash Persaud, a leading economist and investment manager, set out a compelling case for all of those involved in financial markets to stop to consider the ethics of their day-to-day professional practices.

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