A funding shortfall led to the Financial Services Authority (FSA) borrowing a total of £200 million from the banks it regulates, it has revealed.
The FSA had already agreed a £100 million loan facility with Lloyds TSB before the onset of the credit crunch and falling fees combined with rising costs meant this had to be drawn on for the first time.
According to the FSA, this was "to fund a short term deficit in our liquid resources towards the end of the year".
The regulator also had to agree a further £100 million facility with HSBC.
However, the FSA is confident future problems will be avoided.
In its report it said: "Despite the large deficit currently reported, we believe that we remain able to meet our liabilities as they fall due because of our statutory power to raise fees."
Earlier this year, the FSA wrote to banks informing them that any new rules on bonuses would be back dated to include agreements reached after the publication of the Turner Report.
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