This is the Cato Daily Podcast for Friday, December 6, 2013.

I'm Caleb Brown.

What has regulation of financial markets given us?

John Allison, president of the Cato Institute and former CEO of BB&T, says the problems

of individual firms are often known to the market long before regulators even get involved.

We spoke at the Cato Institute's monetary conference last month.

Good afternoon. It's a pleasure to be with you. I first, on behalf of Cato, I want to thank you all

for being here. I know we have a number of sponsors are here

Then I thank you for your support very much you make our work possible I'm gonna talk from a little bit different perspective

Because I'm the only person that actually

ran a bank that's been speaking today.

And from that context, I can tell you with absolute certainty that market discipline beats regulatory

discipline. In fact I will argue that regulatory discipline will always

fail in the context of reducing volatility and it also in the context that it will slow economic

growth. And I base those comments on my understanding of public choice theory and particularly on 40 years of concrete experience in the banking business.

One observation in my 40 year career, I don't know a single time for the federal regulators, this primarily would be the FDIC,

actually identified a significant bank failure in advance.

They're always the last guys to the party.

After everybody in the market,

the other bankers know something's going up.

And so in that context, you have a 100% failure rate.

And in my experience in banks, we took over because we did lots of

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