Variable Proxy variable Symbol Calculation method Bank risk-taking Non-performing loan ratio NPL non-performing loans to total loans ratio (%) Loan allocation ratio LLPR Ratio of loan provisions to total loans (%) Z value lnZ ${z}_{i,t}=\left(r{a}_{i,t}+e{k}_{i,t}\right)/\sigma \left(r{a}_{i,t}\right)$ . $r{a}_{i,t}$ is the average return on assets, $e{k}_{i,t}$ is the ratio of shareholders’ equity to total assets, and $\sigma \left(r{a}_{i,t}\right)$ is the three-year rolling standard deviation of $r{a}_{i,t}$ based on periods $t$ , $t-1$ and $t-2$ . Information disclosure Information disclosure index DIS The disclosure situation of 20 items in BankScope is selected for measurement and defined as: $DIS=\sum {S}_{i}/20$ , where ${S}_{i}$ represents the score of various information disclosure. If it is disclosed, it is denoted as 1; otherwise, it is denoted as 0. Deposit insurance system dummy variable INS Implementation of the deposit insurance system after 2015 takes the value of 1 and 0 otherwise. Core explanatory variable Value of franchise BCV $BCV=\left(RO{E}^{\prime }-{r}_{f}\right)/\left(1+\delta \right)$ , where ROE' is the pre-tax return on capital; ${r}_{f}$ is the risk-free rate of return and δ is the discount rate. Capital adequacy ratio Cap Equity capital to total assets ratio (%) Size of assets Size Natural logarithm of the Bank’s total assets (RMB100 million) Variable of control Loan-to-deposit ratio LDR loan-to-deposit ratio (%) Deposits to assets ratio DAR deposits to assets ratio (%) Interbank offered rate IIR Weighted average interbank lending rate (7 days) (%) GDP growth rate GDPR The national GDP growth rate is used for state-owned commercial banks and joint-stock commercial banks, while the regional GDP growth rate (%) is used for urban commercial banks, rural commercial banks and foreign banks.