"Every time there was a bump, the Fed did everything they could to smooth that bump out," he says. "
Allison says the creation of the Federal Deposit Insurance Corp. in the 1930s provided a "lack of discipline" at financial institutions seeking to grow their deposit bases.
Most importantly, he took issue with the Clinton administration's affordable housing policy objectives, which ultimately led to the solidification of government-sponsored enterprises Fannie Mae and Freddie Mac as major players in the mortgage market.
"Homeownership is a good thing in a broad context, but encouraging people to buy homes they can't afford is not a good thing," he says. "If you want to look at the proximate cause for this mess you got to focus on Fannie Mae and Freddie Mac. They would have never existed in the free market. They drove the mortgage market."AUDIO: Allison says Fannie and Freddie were 'mathematical disasters.' Allison remains BB&T's chairman through this year, but has turned the CEO reins over to former COO Kelly King. Once fully-retired, Allison plans to write several books on topics including the latest financial crisis and leadership. He hopes to enter academia by becoming an "executive-in-residence" at a local college. "I'm going to be out there trying to defend economic freedom at universities," he says. Fitzsimmons, the Sandler O'Neill analyst, says Allison would likely be at home as a professor. "I've always looked forward to any events where he speaks," he says. "Some CEOs get up there and just go through the slide deck and tell investors what they want to hear. He gets up there and actually says what he thinks and what he believes." Allison recommends to the next generation of executives to remain focused on the "fundamentals" of banking, which includes superior customer service, treating your employees well and not offering exotic products. "There are no free lunches," Allison says. "You look at what people tried to do, they did things that were bad for their clients that came back to haunt them."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV