Investors, including foreign investors, are putting money into other Japanese banks and forcing them to make Shinsei-style reforms.
The renamed Shinsei Bank held a public offering that was a roaring success.
But Shinsei Bank (Long-Term Credit Bank, before it went bust) provides some clues.
China Merchants Bank fell 2.6% and Bank of Communications lost 2% in Hong Kong while Tokyo-listed Shinsei Bank fell 5.2%.
Recent isolated examples of this--though ones that took significant foreign instigation--can be found at two significant companies, Nissan Motors and Shinsei Bank.
Many are now looking hard at Japan, following the success of Ripplewood and Christopher Flowers in buying Shinsei Bank out of bankruptcy, cleaning it up and floating it.
This would surely weaken the finances of Shinsei, which has been trying to introduce the alien concept of profit maximisation into Japanese banking, and could scare off other foreign investors.
Shinsei Bank has become a highly profitable financial institution but only after half its assets were written off by the government and a large contingent of outside experts came in to shake up its inbred corporate culture.
The next year, Advantage Partners made a tender offer bid and acquired all outstanding shares for JPY 250 billion, of which JPY 170 billion was financing provided by syndicate whose members included Lonestar, Shinsei Bank, and Credit Agricole.
The American government put in a friendly word (Bill Clinton's friend, Vernon Jordan, has since become a senior adviser to Shinsei) and the Japanese were persuaded that a serious effort would be made to rebuild the bank (it may have helped that the adviser to the Japanese government was, er, Goldman Sachs).
To many bankers, particularly foreigners who have been keeping an eye out for opportunities in Japan, the government's inclination to obstruct reform has been sharply illustrated by last week's order by the Financial Services Agency, a regulator, to Shinsei, a bank now owned by foreign investors, to increase lending to small and medium-sized companies.
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