After 28 years at Merrill Lynch, Herb Allison possessed an insider's knowledge of financial systems that few could match. In the wake of the financial crisis of 2008, he was selected by then-Treasury Secretary Henry Paulson to be CEO of Fannie Mae, the mortgage-finance provider that had been placed under government conservatorship following the collapse of the subprime mortgage market. The following year President Barack Obama nominated Allison to run the $700 billion Troubled Asset Relief Program designed to rescue the U.S. banking system. "Because of Herb's extensive and sound leadership, TARP became one of the most successful financial rescue programs ever created and our nation avoided a second Great Depression," noted Treasury Secretary Jacob Lew in a statement.
Herbert Monroe Allison Jr., MBA '71, died on July 14 at his home in Westport, Conn., of an apparent heart attack, according to his son Andrew. He was 69.
Allison was born in Pittsburgh and grew up on Long Island, N.Y. He spent four years in the Navy, including a tour in Vietnam, before earning his MBA and joining Merrill Lynch, where he served as treasurer, head of human resources, chief operating officer and head of investment banking. In the late 1990s, Allison witnessed some of the biggest upheavals in banking history, including the collapse of the hedge fund Long-Term Capital Management LP. "We were looking at doomsday," he recalled, "potentially worse than 1929." He responded by helping to coordinate a group of 14 banks, including Merrill Lynch, which bailed out the fund and avoided a financial meltdown. In 2011 Allison published a book about the crisis called The Megabanks Mess.
Allison retired from the Treasury Department in 2010 but was called back into service when the Obama administration asked him to lead an independent review of federal loans to energy companies after the bankruptcy of Solyndra, a solar-panel manufacturer that had received federal financing.
Throughout his career Allison was known for honesty and stewardship in a field often associated with corrupt practices. "My father believed in service to others," his son Andrew says. "He was a mentor to my brother and me, and we are grateful to have had him as a role model. He taught me that in both one's professional and personal life, integrity and character are the most important things."
Allison is survived by his wife, Simin Nazemi Allison; sons, Andrew, MBA '10, JD '10, and John; and a brother.
Julie Muller Mitchell, '79, is a writer in San Francisco.
