For bank-owning governments around the world, a cautionary tale from Japan. During the banking crisis of the late 1990s, Japan nationalised several lenders before flogging them on to financial sponsors. Ripplewood, the US private equity firm that led a consortium of buyers for Long Term Credit Bank, now Shinsei Bank, cashed out handsomely in 2004. Some of the original backers of Aozora Bank, now majority owned by Cerberus, also made a mint. The government, however, did not. Tokyo still has funds tied up in the two lenders – both of which expect to post losses for the just-ended fiscal year – and no signs of a swift exit. Tokyo’s Y745-per-share targeted price for Shinsei is six times Friday’s close.

One option under discussion is to merge the two banks,. That would be a distraction. Synergies are negligible. Branch closures, for example, would be minimal, with the combined network just 54-strong. Fusing the two would still leave a bank with no real niche, albeit with a slightly sturdier position. Aozora has capital (its 14.8 per cent tier one ratio is almost embarrassingly robust) that Shinsei (with 6.6 per cent tier one capital and existing hybrids trading at a paltry 20-30 cents per $1) needs. In turn, Shinsei brings funding, courtesy of its big deposit base, which would help ease Aozora’s high loan/deposit ratio.