"Every time there was a bump, the Fed did everything they could to smooth that bump out," he says. "
W hat they did was defer the problems and create a much bigger problem." 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."