Optimization and Empirical Research on Credit Risk Measurement Model of State-owned Banks—Based on Basel III and Time Series Analysis

Credit risk management is central to the sound operation of state-owned banks in the face of emerging challenges in the regulatory and economic framework. This research uses the Basel 3 regulation and time series data to enhance and test a credit risk measurement model suitable for the state-owned bank. The study is based on the principles of quantitative research and applies historical data, macroeconomic factors, and regulation/ compliance indicators to enhance the accuracy of predictive outcomes. The evidence implies that risk management and compliance efficiency have substantially increased. Applying the use of quantitative research methodologies, the study uses the availability of historical data and macroeconomic variables and the use of regulatory compliance benchmarks in order to fine-tune predictive capabilities. It applies advanced econometric techniques with high accuracy, validating RMSE and MAPE as crucial metrics that support the robustness of the model. Findings suggest a significant level of risk mitigation, compliance effectiveness, and predictability reliability, which has relevant and helpful information for policymakers and practitioners working within the banking sector.