Co-operative bank has escaped a fine, with sources at the FCA admitting that it was the first time a bank has escaped a fine in a situation this severe.

An investigation into a governance and risk management crisis which led to it being rescued by hedge funds two years ago has concluded that they were at fault, but an £120m fine will not be imposed.

The reason the FCA gave was that the bank was not in a financial position to pay a fine. Georgina Philippou, the FCA’s acting director for enforcement, agreed that the banks dealings were misleading to investors, but stated that “it is vitally important that Co-op Bank’s capital resources are directed towards improving its resilience.”

The bank is now under new management and Chairman Dennis Holt made it clear that the running has changed.

“On behalf of the bank, I would like to apologise again to customers for these past failings and reassure them that the bank is a significantly stronger organisation today under the leadership of the current senior management team.”