Do Gordon Brown and Alistair Darling share a fantasy: do they imagine themselves triumphantly working the same kind of turnaround on Northern Rock that Christopher Flowers, the billionaire private equity investor, managed in Japan. Flowers himself clearly saw the chance with the failed UK mortgage lender to repeat his career-defining success in reviving the bust LTCB and re-floating it as the born-again Shinsei Bank at a huge profit.
The Japanese government, advised 10 years ago by Goldman Sachs just as the UK government is today, nationalized LTCB in 1998, sold it to Flowers for a small sum in 2000, yet retained liability to clear its worst bad debts, so enabling Flowers to restructure the bank and reap a huge financial gain.
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