Is there a pot of gold at the end of the rainbow? Private equity groups seem to think so. JC Flowers, AnaCap Financial and Corsair Capital are sniffing around the retail and business banking operation – codenamed Rainbow – that Royal Bank of Scotland has to sell. Banks are not an obvious fit for private equity. The traditional model, involving a debt-funded purchase, a few years of restructuring and a fairly quick exit, is tough to replicate in a capital-intensive industry known for its balance sheet woe, regulatory uncertainty and political pressure. Past experience is mixed. JC Flowers turned round Japan’s Shinsei Bank, but TPG lost $1.3-billion (U.S.) investing in Washington Mutual.