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BB&T Chairman on Opposing TARP

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  • Description

    BB&T Bank Chairman John Allison explains why he was opposed to receiving a government bailout.

  • Duration 5:02
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This transcript is automatically generated

Yeah.

This FA -- had warned the world that Europe was on a road to serfdom.

Now Americans halfway there all of us are bound in chains of laws and -- regulations so.

Who then are the champions -- freedom.

To free us from that -- -- politicians.

Or we asked people to their champions of freedom they gave examples like these Obama.

-- an imminent I would take place.

Where all them to be fair President Clinton did sign welfare reform.

JFK cut income taxes and president Obama's is gonna do away with -- -- over regulation.

-- believe that when we see it.

In any case I don't see most politicians champions of liberty and anything they take away some of our liberty they all pass rules that make it harder for us live a free life.

These Republican presidents gave us lots of rules to.

When I think it heroes I think about entrepreneur no worse business -- and scientists and artists who.

Invent things that free us free us from material want.

And free our minds and with that thought we start tonight with two entrepreneurs who fight for freedom.

-- Forbes of Forbes magazine.

And John Allison chairman of one of the biggest banks in America.

On this show we talk about than providing people.

The power to prosper but John I'll start with you I mean some people would say you bankers don't give people that you just.

Move money around and grab a big piece for yourself.

-- banking is essential to a healthy economy what banks do -- allocate capital to people that deserve it.

That we see really big problems in our economic system when the banks do -- bad job of allocating capital and give to the wrong people through the right.

And I include -- is fighter for freedom because when the bailouts -- you said.

We don't want this money -- you spoke against it few bankers did.

That's true I actively.

Lobbied congress not approved TARP the bailout program.

It was a tough exercise in that thousand only -- you have a large bank it was supposed to -- and not the tragedy they card how did -- work they call regulator called up and said.

Well -- I wrote congress doesn't -- -- partner in part path.

And then we got a call from our primary regularly as we -- largest -- in America and he says you know John.

You guys have way more capital than -- by our standards but we decided change -- capital standards and under our new capital standards which we don't know what they are.

We don't think you have enough money lets you take.

And it and the implied.

Implication was brutal come and see you very city and if you don't take TARP you're in really serious trouble with we -- rules and argument about it.

So we ended up tankan TARP now what's interesting John what was the motivation for that while the regulators won't -- -- -- -- The head of the Federal Reserve Bernanke is that he was a student of the depression which is one of the problems.

And during the depression when it was known that a bank was taking government money that the market job done.

So he had three large banks are getting ready to fail he had to force the healthy banks to participate.

The make it look good.

And it it was a -- offer healthy banks -- we didn't need the money we never even had a single quarterly loss and we paid a huge interest right.

And they do -- -- -- necessary audio -- more cap and unity.

That -- -- you even more outspoken about freedom than most businessman and which is written by and -- in this -- your brain it didn't finance had a huge influence on my thank you.

That is -- store one reason we didn't get in trouble and in sub prime lending was because of our philosophy.

And a lot this this is trying to a lot of people see greed on Wall Street is -- sub prime lending.

You had a -- of course the government policy really driving and there was a certain ethical justification -- Mike and affordable housing loans was a good thing.

And also just to clarify government policy Fannie and Freddie guaranteeing all these loans.

And the government encouraging you lend to people who might have risky credit.

Right but with the banks we're under this moral pressure not just that you have from -- -- money doing it would it was the right thing to do.

And -- realized he was wrong thing to it was a redistribution.

From productive people -- non productive people and it was gonna end badly for that reason.

So we resisted as much as we possibly could because we -- realized it was wrong thing to do.

And -- you will not loan money to developers that use eminent domain to Graham property.

When the when -- decision was passed and basically there was court blocks for the government to take somebody's property given to some -- private individual we say we wouldn't let.

Lent to developers that did that.

And interestingly enough John we lost some public in India tails because they like you -- tonight we have thousands of people move their checking accounts have been BP which we didn't even expect.

Because they say look in -- a mine is wrong and also it's very important for businesses to stand on principle.

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