Taiwanese Banks Amplify U.S., China Investments as Global Exposure Expands

Taiwanese banks have sharply increased their financial exposure to the United States, reaching USD194.87 billion by the end of June, marking an 8.22% hike from the previous quarter. Hsieh Jen-chun, deputy head of the central bank's Department of Financial Inspection, confirmed on Friday that this surge was driven by a boost in interbank loans and investments in U.S. stock and bond mutual funds.

At the same time, China climbed to become the second largest debtor to Taiwanese banks, with exposure escalating by USD2.38 billion to USD48.50 billion. This rise, amounting to 5.16%, resulted from Taiwanese banks leveraging a stronger yuan to increase their investments in China's bond market and to extend additional interbank loans, according to data.

The disparity between Taiwan's financial exposure to the U.S. and China continued to grow, reaching a historical high of USD146.4 billion by the end of June. The overall international claims by Taiwanese banks, encompassing loans, investments, deposits, and other holdings, witnessed a 5.57% rise to USD648.2 billion, largely fueled by increased lending to nonbank entities.