As the public face of the federal bailout, Herb Allison served as a frequent punching bag for critics of its big-bank beneficiaries.

Allison, who unexpectedly died at age 69 over the weekend, clashed with Elizabeth Warren and Neil Barofsky, the bailout overseers tasked with ensuring that the Obama administration spent hundreds of billions of taxpayer dollars wisely. A buttoned-up industry insider who spent most of his career at Merrill Lynch, Allison defended the way in which the government rescued an industry that had imperiled the U.S. economy.

But, as Allison revealed after stepping down from his Treasury Department post in 2010, he and his adversaries agreed on the causes of the crisis and the long-term solution: dismantling the big banks.

"I think that the megabanks' shareholders, employees and clients would be much better off if those banks were broken up, and the resulting independent firms each focused on a particular client base," Allison told American Banker in 2011. "I think we'd have a much healthier financial system because there'd be a lot less systemic risk as well."

Following Allison's death from a possible heart attack, friends and onetime foes alike offered praise for his willingness to take on a tough job at a time of crisis.

"You knew he wasn't here for personal advancement. You knew he'd rather be enjoying his retirement with his wife," says Timothy Massad, who succeeded Allison at the Treasury. "He had a very strong sense of duty."

Barofsky, the former special inspector general for the federal Troubled Asset Relief Program, tweeted Tuesday, "We had our differences, but Herb was a true patriot, coming out of retirement to serve his country."

Allison said in 2011 that big banks needed to refocus on customers. "With a sole focus on profits, the level of profits is never enough," he said. "To keep the game going, they had to increase risk in all kinds of ways. And so they ended up facing collapse."

Citing an argument that Warren, now a Senator, made recently, Allison warned: "We now have a financial system that, even after the bailouts, is more concentrated than before, so the system is even more vulnerable to problems in those banks down the road."

Allison started his career at Merrill in the early 1970s, and he later spoke wistfully about what he described as that era's simpler, slower-changing financial industry.

"In Wall Street's culture back then, investment bankers considered it impolite or even crass to compete for each other's clients," he said.

He rose to become Merrill's president, but after being passed over for the chief executive job, he resigned in 1999. Three years later he took the helm of the investment firm TIAA-CREF. That perch seemed to influence his view that big banks do not serve their clients well.

"If you look at financial firms, you see that the megabanks score very low in trust among their own retail clients and the general public," Allison said in 2011. "Other, more focused, client-centered financial firms have much higher trust levels."

By September 2008, Allison had retired from TIAA-CREF and started writing an article that would soon be put on hold, but would eventually become a 2011 e-book in which he advocated breaking up the big banks.

The story of how Allison got the job of financial crisis firefighter was recounted in Andrew Ross Sorkin's book "Too Big to Fail." Shortly before the Bush administration announced plans to take over Fannie Mae and Freddie Mac, a Treasury official called Allison to ask if he'd become Fannie's CEO.

When his phone rang, Allison was on the beach in the Virgin Islands. "For reasons of public service, I'm interested in this job," Allison was quoted saying. "I want to help you guys, and so you have to let me know what to do. I don't have any clothes. All I have is shorts and flip-flops."

Allison spent less than a year at Fannie before being named assistant Treasury secretary for financial stability in April 2009. At the time there were still questions about whether AIG would fail. Chrysler and General Motors had yet to go through bankruptcy restructuring.

If Allison believed then that the big banks should be broken up, he must have held his tongue while working for then-Treasury Secretary Timothy Geithner, who hated the idea.

Allison never craved public attention, and disliked the way stories about the financial crisis were often framed around personalities. That might explain why his powerful 2011 e-book — titled "The Megabanks Mess" — drew far less attention than other tomes about the crisis.

"I can see why it's kind of interesting that I was a leader in the industry and now am criticizing the structure and business models of the industry that I was part of building years ago," Allison said in 2011.

"But the real story isn't about me or leaders who later ran the megabanks during the boom and crash. It's about what's in the interests of the American public, what's needed to help stabilize and make more efficient the financial system in the United States."

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