Rather than slap The Co-operative Bank with a £120m fine for "serious" failings in its systems UK financial regulators have decided to publicly shame the firm instead. In a joint investigation of the bank's practices, the Bank of England's financial regulator and the UK's Financial Conduct Authority (FCA) found the firm's risk management system was "flawed".

Regulators found "serious and wide-ranging failings in Co-op Bank's control and risk management" system between 22 July 2009 and 31 December 2013, said the Bank of England's Prudential Regulation Authority (PRA) in a statement on Tuesday 11 August. On 22 November 2013, the Treasury announced it would begin an independent investigation of the bank under the Financial Services Act.

"The firm did not adequately consider the level of risk it assumed and therefore did not have the capability to manage that risk" when lending money the regulator found. What is more, the "firm failed to deal with its regulators in an open and cooperative manner".

Usually, the breach of financial rules would carry a £120m (€169.4m, $186m) fine. But, as the FCA points out, the Co-op Bank needs to make sure it "has adequate capital to withstand a severe stress".

Between 2013 and 2014 the bank's creditors bailed it out with £1.5bn after a £1.3bn loss following an expansion attempt. In the early part of 2014, the bank lost 28,000 customers. The PRA said imposing a financial penalty on the bank at this time would go against its "statutory objective to promote the safety and soundness of the firms it regulates".

Since coming under investigation and getting a bail out the bank has made strides to tend to its failings, said Dennis Holt, the present chairman of the bank in a statement following publication of the regulators' findings.

"Towards the end of 2013, following changes to its Board and senior management," Holt said, "the Co-op Bank began properly to address the concerns around its risk management framework structures and policies and procedures around corporate lending and capital management."

Holt took the opportunity to "apologise again to customers for these past failings" and reassure them "the Bank is a significantly stronger organisation today under the leadership of the current senior management team".