The US ranked as the largest debtor country to banks registered in Taiwan as of the end of September for the 21st consecutive quarter, while China retained second place, the central bank said on Friday, adding that local banks’ exposure to the two countries grew from a quarter earlier.
Outstanding international claims by Taiwanese banks on the US totaled US$94.29 billion as of the end of September, up about US$2.38 billion from the previous quarter on a direct risk basis, marking the second consecutive quarter of growth, data compiled by the central bank showed.
On an ultimate risk basis, which calculates a country’s consolidated debt after risk transfers, Taiwanese banks’ exposure to the US rose to US$89.90 billion, up from US$89.32 million over the period, the data showed.
Banks’ outstanding international claims on China rose US$2.05 billion from a quarter earlier to US$49.81 billion, also marking the second straight quarter of growth.
The increase came as yuan’s appreciation led to an increase in Taiwanese bank loans, the central bank said.
In addition, banks’ investments in Chinese bonds also boosted their exposure, it said.
Luxembourg remained in the third spot, as Taiwanese banks’ exposure on a direct risk basis stood at US$39.22 billion, up from US$37.51 billion a quarter earlier, ahead of Hong Kong (US$33.91 billion), Japan (US$32.86 billion), Australia (US$25.07 billion), Cayman Islands (US$19.16 billion), the UK (US$15.17 billion), Singapore (US$14.74 billion) and the British West Indies (US$12.20 billion).
The banking system’s aggregate international claims on a direct risk basis rose 1.3 percent from a quarter earlier to US$461.7 billion and the exposure to the top 10 debtor countries stood at US$336.4 billion, or 72.87 percent of the total, the data showed.
Despite the COVID-19 pandemic, banks’ international exposure is on the rise and it remains to be seen whether an escalation of the pandemic worldwide will reverse the trend, the central bank said.
The non-banking private sector worldwide accounted for 62.27 percent of Taiwan’s total international claims on a direct risk basis, with the banking industry making up 28.34 percent and the public sector representing 9.38 percent, it said.
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