Allison thinks the [bank risk] models are doomed from the get-go because they are based on fundamentally incorrect notions. “They always assume normal curves, and they try to manage things to a 99 percent probability. That means there’s only a 1 percent probability that certain bad things can happen. Well, there’s an interesting thing with a 1 percent probability: Give it long enough, and it becomes certain.”
- Former BB&T chief executive officer John Allison, quoted on page 84 of I Am John Galt, by Donald L Luskin and Andrew Greta. (The chapter on Paul Krugman is gruesome reading.)
I heard Allison speak in London about a year ago, and he’s very good.