The Effect of Credit Risk Management on the Profitability of Commercial Banks in Emerging Economies

Posted: May 14, 2015

• Sophia Thompson
• Theodore Roberts
• Victoria Campbell

Abstract

The relationship between credit risk management and bank profitability represents a fundamental concern in financial economics, particularly within the context of emerging economies where institutional frameworks and market mechanisms remain in developmental stages. This research introduces a paradigm shift in understanding credit risk management by applying quantum-inspired computational models to financial analysis. The quantum probability framework allows for the representation of interdependent risk factors that traditional models treat as independent variables, thereby providing a more accurate depiction of risk dynamics in volatile economic environments. The novelty of our approach lies in its ability to model the superposition of risk states and the entanglement of economic indicators that characterize emerging market banking systems.