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11 of 11 found the following review helpful:
 One well chosen case to illustrate a systemic problem Sep 27, 2006
By Vincent Poirier
Saving the Sun is about the corporate culture of Japan's financial industry and how it is changing. Gillian Tett focuses on one institution, The Long Term Credit Bank, to illustrate what happened and how the financial environment in Japan is changing.
The LTCB was a key player in Japan's post war miracle. It lent money to fund business operations and new ventures, working in close cooperation with the elite bureaucrats of Japan's Ministry of Finance and Ministry of International Trade and Industry. Then in the 1980s, drunk on its spectacular success, Japan Inc. excessively invested in thoughtless projects, all funded by the LTCB and the rest of the financial industry, with no thought at all given to making money. Prestige was everything.
As a result, the Japanese financial system almost collapsed; what survived had to change. Banks began failing despite attempts by the Ministry of Finance to organize rescues. Some failed banks were nationalized, among them the LTCB; these institutions were then put up for sale but no one in Japan wanted them.
There were tragedies. Katsunobu Onogi, a fatherly and admirably responsible gentleman of the old school, was arrested and charged, spending a month in custody before being found guilty and sentenced to three years in jail, suspended. A colleague, Takashi Uehara, committed suicide, which in Japan is a gesture of atonement, not an escape. At another bank, the president parachuted in from the Bank of Japan, Tadayo Honma, also killed himself again to atone for the system's failure.
Then Tim Collins's Ripplewood, an American fund, arrived and offered to rescue the LTCB. This was politically difficult. The Japanese don't like foreign ways, and the thought of a pillar of Japanese finance being bought out by foreigners provoked public outrage. In the end MoF had no choice and the deal went through.
The bank was renamed Shinsei, meaning "Rebirth" in Japanese. A remarkable man, Masamoto Yashiro, was hauled out from a second retirement after a full career at Esso Sekiyu (Exxon's Japan operation) and the creation of Citibank's Japanese retail business, to oversee the reconstruction. Clash was inevitable. The conservative rank and file employees had no idea how to work with the hyperactive can-do go-go-go managers now running the show. A new Indian head of IT, Jay Dvivedi, junked the old mainframes and installed, in mere months, a new state-of-the-art system featuring PCs on every desk and instant access to whatever reports management wanted. The corporate planning department, which decided new products, disappeared: henceforth Shinsei would listen to its customers to determine their needs.
The financial revolution isn't over. Shinsei's success wasn't total. Major clients were allowed to fail, Sogo department store went bankrupt. Politicians blamed Shinsei for not being kinder to its debtors.
I've worked for the IT departments of foreign banks in Japan since 1995 so this book strikes particularly close to home for me. I can even see the Shinsei headquarters from my desk. Interesting and informative. Recommended.
Vincent Poirier, Tokyo
11 of 13 found the following review helpful:
Fun and worth reading Oct 20, 2003
By Oliver Chubb
"olivercc"
A well written, very easy read which captures a lot of information in a relatively short book, each section (1-LTCB's rise 2-The sale/purchase 3-the transformation) could be a book on its own. While I accept that this book could not go further into MOF's failure to regulate as it should have done, Gillian makes it clear that this book is the history of one bank not the Japanese financial system, I wish she had been able to do so and I also have to agree with John Zwaanstra's comment that the bad debt work out should have been gone into in greater depth. Still, without going for thousand pages into all the complex issues the book captures nearly all the different pressures that played into decision making and makes one think about the results from a variety of perspectives.In sum, I greatly enjoyed reading it and strongly recommend it.
10 of 12 found the following review helpful:
 Good but not the whole story Sep 29, 2003
By Mulling it over in Minato-ku
Overall Tett has done an exemplary job in summarizing the basic events surrounding LTCB / Shinsei. Her access to senior Japanese management of the old LTCB is particularly impressive. No Japanese journalist has gotten such close personal access to the men involved. In addition, her book provides very thorough background of the history of Japanese banking right up through the "bubble" years. Tett's book , however, does have some shortcomings. First and foremost, she overstates the role of Yashiro and drastically understates the key role of Chris Flowers and Brian Prince in the bad loan cleanup phase. Those two, more than anyone else, deserve credit for doing the really tough work. Moreover she appears to have fallen under the spell of the very glib Tim Collins and therefore has exaggerated his contribution as well. Collins is essentially a money raiser, he is not the architect of the LTCB/shinsei deal. Flowers again deserves the credit here. Perhaps Tett missed this because Flowers is famous for his reticence with the press. Lastly Tett seems overly focussed on the (gasp!) fact that some financial sector employees in Japan (gasp!) frequent strip clubs and hostess bars. I guess she hasn't been out on the town in London or New York recently.... SUMMARY: Good general chronological summary and overview but lacks deep understanding of key element -- the bad debt workout.
6 of 7 found the following review helpful:
overall fine, but... Mar 08, 2004
As others have commented, Saving the Sun provides a good chronology to the LTCB takeover, a significant event in Japan's recent history. But there are problems with the book. I lived in Japan during most of the 1990s, and Tett's constant pigeon-holing of the Japanese and American attitudes contains some truth but is exaggerated and becomes tedious. (Even the title is an exaggeration.) Tett may be a financial journalist, but there are enough errors that one questions her expertise on the subject matter. In addition, it is difficult for the reader to get a sense of the scope in some sections as numbers are almost never provided within a clear context. For example, Japan's debt may be "horrendous" although its savings may be "staggering." What is the horrendous/staggering ratio, and how has it changed? Still, readers interested in Japan should read through the shortcomings because the anecdotes Tett provides are interesting and the story itself is important to understanding what is happening inside Japan's financial sector today.
10 of 13 found the following review helpful:
! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ? Feb 19, 2004
"I would put an exclamation point at the end of all these sentences! On this one! And on that one!" The above speech from Seinfeld's Elaine pretty much sums up my feelings regarding Ms. Tett's attempts at "writing". I feel like Franklin Dixon (yes, he of Hardy Boys fame) wrote this account of LTCB/Shinsei. Much of the dialogue (whether direct quote, questionable translation, or fanciful conjecture) is peppered with inappropriately many exclamation points, making the story sound like a teenage mystery adventure novel. Aside from the unnecessary dramatization, and the author's tendency to intersperse good economic analysis with poorly considered social commentary about Japan, the book is informative and interesting. If you are interested in learning about the main players in the Shinsei drama, and learning a fair bit about the differences between Japanese and western political and financial systems, then this book is definitely worth the three stars I am giving it. I just finished reading Saving the Sun, and today (2004-Feb-19 in Japan) Shinsei actually completed the IPO mentioned in the book. The shares were offered at the upper end of the range, and traded at a 66% premium. It looks like Collins, Flowers and Co. will be making a handsome profit for their investors, after all. Let's wait and see #1: let's see if New LTCB Partners CV (Netherlands) is allowed to get away with paying zero tax in Japan. Let's wait and see #2: let's see if Japan ever allows foreign investors to get this much control in this profitable a local investment ever again. Let's wait and see #3: let's see if the Shinsei experience has any lasting (positive) effect on reforming the Japanese financial system -- history says it won't, but we keep hoping. Finally, one material transgression worth noting is the author's reference to Anil Kashyap of "Chicago University". Professor Kashyap is certainly a good teacher and a great researcher, but we prefer to refer to the institution as the "University of Chicago" -- please take note for the 2d edition, Ms. Tett.
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