Tett is able to wear two hats simultaneously, providing us with a more entertaining as well as informative work due to her sociological as well as economic insights. Rather than supplying a series of charts explaining what happened to Japan's banking culture, Tett instead supplies an informative analysis of events by focusing closely on the movers and shakers from Japan and America involved in the volatile existence of Japanese banking from the nation's crushing defeat in World War Two to post-9-11.
The tide of events is organized into basic categories, all flavored with the insight of a trained financial journalist telling her story in the manner of a perceptive novelist. The story is seen from the perspective of Long Term Credit Bank, one of the nation's most revered institutions, which soared like an eagle during Japan's heady days of economic expansion, then descended like a wounded duck in the wake of a sea tide of bad loans occasioned in large measure by inflexible cultural traditions. When its hapless president, LTCB veteran Katsunobi Onogi, was ultimately arrested and successfully prosecuted for covering up series' of bad loans concerning which he was expected to take diligent action, he lamented that he was victimized by a tradition that mandated such an attitude. Tett reveals the tragic results of a tradition in which, whereas Swiss and American bankers expected losses to be written off and no more money extended to the distressed subsidiary banks and companies, the powers that be believed that the economic system should be treated as a family. To cut off such institutions involved, in the Japanese view, a divorce rather than a necessary business move.
Tett demonstates the markedly different ways that the Americans and Japanese see the overall economic picture, along with basic differences in how work forces are observed, when she writes about the purchase of the collapsed LTCB by an American team led by Kentuckian Tim Collins, friend and confidante of President Bill Clinton. The American group led by Collins changed the name of LTCB to Shinsei, then set out to achieve a profound positive change. Never is the disparity between American and Japanese cultural viewpoints more evident than when Collins and a team of Americans decide to have lunch in the bank canteen. The extroverted Kentucky business giant and his group, which includes Vernon Jordan, seeks to socialize with members of the work force, who have never seen such a display in their lives, sticking to their own small clusters of co-workers and disdaining fraternization.
Gillian Tett has provided the reader with a great service. This book provides an opportunity to understand the economic strategies of the Japanese economic system and the cultural divide that often permeates interaction with Americans who disdain tradition for a practical "bottom line" operating pattern.
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.