Herbert M. Allison Jr.’s Role in the 2008 Financial Crisis Bailout

From 2009 to 2010, Herbert M. Allison, Jr. held the position of overseeing the Troubled Asset Relief Program (TARP). Prior to this, in 2008, he was appointed as the CEO of Fannie Mae when the company was placed under conservatorship.

During his tenure as head of TARP, Allison was responsible for managing the government’s efforts to stabilize the financial system in the wake of the 2008 financial crisis. This involved overseeing the distribution of funds to banks and other financial institutions that were struggling to stay afloat.

Allison’s experience in the financial industry made him a natural choice for the role. Prior to joining Fannie Mae, he had served as the president and CEO of TIAA-CREF, a leading provider of retirement services for people who work in the academic, medical, and cultural fields.

Under Allison’s leadership, Fannie Mae underwent significant changes aimed at improving its financial stability and reducing its risk profile. This included implementing new risk management practices and reducing the company’s exposure to risky mortgage loans.

Despite these efforts, however, Fannie Mae continued to struggle financially. In 2011, the company reported a loss of $14 billion, prompting calls for further reforms and restructuring.

Allison’s tenure at Fannie Mae was not without controversy. Some critics argued that his background in the financial industry made him too sympathetic to the interests of banks and other large financial institutions.

Others pointed to his compensation package, which was among the highest of any CEO in the financial industry at the time. In 2010, Allison earned over $4 million in total compensation, including a base salary of $900,000 and a bonus of $3.15 million.

Despite these criticisms, however, Allison remained committed to his role at Fannie Mae and continued to work towards improving the company’s financial stability and reducing its risk profile.

Today, Allison is widely regarded as one of the most influential figures in the financial industry. His experience and expertise have helped to shape the way that banks and other financial institutions operate, and his leadership has been instrumental in guiding the industry through some of its most challenging times.