The United States was the largest debtor to Taiwan’s banking sector for the 19th consecutive quarter as of the end of March, while Taiwanese banks’ exposure to Washington fell amid the COVID-19 pandemic, according to the central bank.
Data compiled by the central bank showed outstanding international claims by Taiwanese banks on the U.S. as of the end of March totaled US$84.36 billion on a direct-risk basis, down from US$89.75 billion a quarter earlier.
China continued to rank as the second largest debtor to Taiwanese banks with exposure of US$46.13 billion at the end of March, down from US$47.44 billion from the end of December, the central bank said.
At the end of March, outstanding international claims by the local banking sector fell 3.40 percent from the end of 2019 to US$438.5 billion on a direct-risk basis, the data showed.
The central bank said the decline in banks’ exposure to the global market reflected the falling market value of assets on the back of COVID-19 in the first quarter, while appreciation of the U.S. dollar against many other currencies in the quarter also affected the value of outstanding international claims as exposure was converted into the U.S currency.
In addition, the central bank said, volatility in global financial markets forced investors to take their money back to avoid further losses, a move that sent banks’ exposure lower.
Hong Kong was the third largest debtor to Taiwan’s banks after the U.S. and China, with outstanding international claims at US$37.04 billion, ahead of Luxembourg (US$32.02 billion), Japan (US$31.32 billion), Australia (US$22.64 billion), the Cayman Islands (US$18.76 billion), the United Kingdom (US$18.61 billion), Singapore (US$16.24 billion), and the British West Indies (US$12.38 billion).
Bank exposure to Taiwan’s top 10 debtors at the end of March stood at US$319.5 billion, accounting for 72.86 percent of the total international claims on a direct-risk basis, the central bank said.
The non-bank private sector worldwide accounted for 57.70 percent of total international claims on a direct-risk basis, with the banking industry making up 32.33 percent and the public sector representing 9.97 percent, the central bank said.
Source: Focus Taiwan News Channel