“Explain the role of Shinsei Bank in the financial system. Access its exposures and performance during the 2007-2011 financial crisis. Did it do good or bad?"Description of the bankShinsei bank has had a checkered history since its predecessor was called Long Term Credit Bank of Japan (LTCB), which declared bankruptcy during the financial crisis in Asia in 1998. Until 2000, with New York based Ripplewood' Holdings made an acquisition, took over the bank and renamed it 'Shinsei' which represented the 'renaissance' Shinsei is now a leading commercial bank providing a wide range of financial products and services to both institutional and individual clients. The bank aims to become the best "retail bank" in Japan, therefore it has divided its business into three components: retail banking (core competency), institutional banking and trade finance (mainly through its subsidiaries). Interestingly, the Japanese government, as the second largest shareholder, held a 23.9% stake in Shinsei Bank. Assets and Financing Shinsei Bank's total assets amounted to $115 billion at the end of 2007 and a large percentage, about 48.78%, was used for loans to customers due to retail banking, a further 17.2% was attributed to purchasing and investing securities, while loans from other banks accounted for only 9.5%. After eliminating total equity of $9.65 billion, total liabilities come to $105.6 billion. The largest share, about 55%, came from retail banking, deposits and negotiable certificates of deposit; furthermore, an additional 6.27% was attributed to bonds after consolidation. Retail banking, as the core business of Shinsei Banking Group, has developed a stable, liquid and low-cost financing base. In its non-core businesses, although there has been slower growth in... middle of paper... foreign securities and written off goodwill belonging to its subsidiaries. As a result of the collapse of bank capital and the rapid growth of risk-weighted assets, the bank's Tier 1 capital ratio fell from 8.11% at the end of 2006 to just 6.02% at the end of 2008. With the new strategy of "getting back up to speed with retail banking" and the liquidation of impaired assets, the bank achieved its Tier 1 capital target of 7.76% at the end of 2010. What bank executives learn Shinsei from the substantial losses due to the financial crisis is the importance of risk management in corporate governance. The bank should focus on its core competency, retail banking, and mend customer relationships by providing proactive assistance, so as to establish stabilized revenue bases. Furthermore, the bank should sell its non-core assets and foresee any risks.