Yeager to Work With Banks Through ABA Chair

Tim Yeager wants to help Arkansas banks manage their interest-rate risk.

“Most community banks struggle with asset-liability management because it’s more subjective,” he said. “There are not as many cut-and-dried guidelines they can utilize. They’ve been under assessing those risks, but fortunately those risks have been small.”

For financial institutions, asset-liability management concerns matching the maturity of their deposits with the length of their loan commitments to keep from being adversely affected by rapid changes in interest rates.

Yeager, an expert on asset-liability management, started work in January as an associate professor of economics in the University of Arkansas’ Walton College of Business.

He’s also the first holder of the Arkansas Bankers Association chair in banking, which was made possible by a $750,000 endowment in 2004 from the ABA. That gift was matched with funds previously given to the UA by the Walton Family Charitable Support Foundation.

Besides teaching Advanced Commercial Banking and a doctoral seminar in the fall, Yeager plans to do a series of studies on issues that impact community banks in Arkansas.

“One of my goals is to help Arkansas banks understand the environment that they’re operating in,” he said, “and help them get information to do their jobs better.”

Yeager said he will keep the data for particular banks confidential. He thinks it will be a symbiotic relationship.

“This area is extremely vibrant in banking,” Yeager said. “It allows me to learn from them.”

Yeager earned a bachelor’s degree in business from St. Louis University in 1987, a master’s in economics from Washington University in 1990 and a doctorate in economics from Washington U. in 1993.

After that, Yeager taught economics for two years at Ithaca College in upstate New York and 2.5 years at Humboldt State University in Arcata, Calif.

In 1997, he went to work as an economist for the Federal Reserve Bank of St. Louis, one of 12 Federal Reserve Banks established by Congress in 1913 as the nation’s central bank. The Federal Reserve is responsible for managing the nation’s supply of money and credit, regulating certain banking institutions to insure their safety and soundness, and serving as a bank for depository institutions and the federal government.

At the Fed, Yeager conducted research on emerging banking issues, especially those concerning commercial banking. He was promoted to senior manager of Supervisory Policy Analysis, a unit of Bank Supervision and Regulation. By the time he left at the end of 2005, Yeager had been promoted to assistant vice president of Supervisory Policy Analysis, which consisted of four economists and two research assistants.

“I wanted to get back into academics,” he said. “While I was at the Fed, I usually taught one banking class each semester at St. Louis University.”

Yeager said he can bring “real-world experience” into the classroom for UA students.

Yeager plans to do public outreach by speaking to various groups around the state. He’ll also be available “on a bank-by-bank basis” to provide assistance with asset-liability management issues.