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The model also explicitly takes into account different non-interest costs across balance-sheet components that banks expend on resources in the course of managing their balance sheet-costs that Dia and VanHoose (2017) show currently make up more than half of the variable expenses incurred by U.S. banks.
These structural parameters may include regulatory costs associated with the corresponding balance-sheet component.
Although large and small banks may have different magnitudes of balance-sheet components and
It faces the same federal funds rate as the banks, but has different mag- nitudes of balance-sheet components and structural parameters.
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