Product Description

Saving the Sun tells the story of the world's largest private equity deal where American investors made billions of dollars rehabilitating Shinsei, a failed Japanese bank. Within that business saga is the dramatic tale of Japan's brightest financial minds, the men who made the Japanese economic miracle come to life, and their struggle against the economic failure in the 1990s. Into this climate of despair, where Japan seemed incapable of reviving prosperity, came a group of wily and determined Americans who would discover just how different the Japanese really are.

Product Details

• Amazon Sales Rank: #100503 in Books
• Published on: 2004-09-01
• Released on: 2004-09-07
• Original language: English
• Number of items: 1
• Binding: Paperback
• 384 pages

From Publishers Weekly
Financial journalist Tett asks why the economic engine that achieved phenomenal growth for Japan between 1953 and 1970 has been stalled since 1990, with 2003 marking the fifth consecutive year of deflation. Puzzled by the persistent stagnation and dissatisfied with prevailing macroeconomic explanations, Tett has taken an intriguing alternate route to investigate what has gone wrong: she focuses on the history of the Long Term Credit Bank (LTCB) as it evolved from financing industrial customers during the boom years to expanding its portfolio with real estate loans in the 1980s and recent attempts to reinvent itself as Shinsei Bank after being purchased by a U.S. consortium in 2000. The twists and turns of the fascinating LTCB saga are cultural and political eye-openers, but Tett also thinks that the problems she found in the bank are symptomatic of Japan's economy as a whole. She argues that one consequence of Japan's reliance on old ways of doing business was the proliferation of nonperforming loans, burdening the banking system to the tune of more than a trillion dollars in the 1990s; she sees the meltdown of the LTCB and the need to put it up for sale as an inevitable result of failure to get tough with rafts of deadbeat borrowers. When the determinedly entrepreneurial U.S. consortium took over the LTCB with a vision of transforming it into a viable commercial bank, it soon discovered a vast number of hidden bad loans along with unexpected resistance to the consortium's new business strategies. Her candid assessment in this lively volume is certain to stir debate since she points an accusatory finger at what she characterizes as paralyzing traditions of consensus thinking, harmony, hierarchy, insularity and resistance to change, especially if the proposed changes originate with non-Japanese. Illus. not seen by PW.
Copyright 2003 Reed Business Information, Inc.

From Booklist
In the 1980s, Japan's heady financial growth spurt had everyone wondering whether they were going to take over the world, economically speaking. That period created one of the world's largest stock and real estate bubbles ever, and the subsequent fallout has created enormous levels of bad debt that have threatened time and again to collapse their banking system. Rather than giving another overview of Japan's 13-year economic downturn, this book focuses on the history of one specific bank, the Long Term Credit Bank, which typifies the problem. This character-driven story shows how the protectionism and chronic denial of wrongdoing that stem from Japan's cultural avoidance of public shame have allowed nearly $1 trillion in bad debts to fester for all this time. Tett follows LTCB through its collapse in 1998, when an American company stepped in and tried to introduce Wall Street-style management technique, which did not go over well. This focus on one particular bank gives a microcosmic view of Japan's business ethic and a not particularly positive view of their future. David Siegfried
Copyright © American Library Association. All rights reserved

Review
"... goes to the heart of Japan's current predicament - and the possibilities of change. (A) path-breaking new book." -- Kent Calder, Director, Edwin O. Reischauer Center for East Asian Studies, SAIS, Washington, D.C., and former Special Advisor to the US Ambassador to Japan, 1997-2001

"A riveting account ... and an insightful analysis of the factors behind Japan's prolonged economic malaise." -- Laura Tyson, Dean, London Business School, and former Chair of the Council of Economic Advisors for President Clinton

"A superb, insightful book ... Written with wit and enthusiasm, this tale is both a fun read and a must read." -- Clyde Prestowitz, President - Economic Strategy Institute, author of Rogue Nation

"Classic tale of East meets West ... Tett makes (it) as intriguing in business as it is in war or romance." -- International Herald Tribune

Customer Reviews

One well chosen case to illustrate a systemic problem
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

Fun and worth reading
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.

Good but not the whole story
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.