The United States remains Taiwan banks' largest debtor, with local exposure reaching a record high US$113.28 billion in the second quarter of 2021.
According to data from the Central Bank of the Republic of China released earlier this week, the banking sector's outstanding international claims totaled US$504.1 billion to the end of June, up 3.76 percent on the previous quarter.
Local banks' exposure to U.S. debt on a direct risk basis saw a quarterly rise of US$11.8 billion, with the central bank citing investments in the U.S. market and Taiwanese deposits in U.S. banks for the increase.
Exposure on an ultimate risk basis -- which calculates a country's consolidated debt after risk transfers -- rose from a first-quarter total of US$99.18 billion to US$108.83 billion.
China remained in second place, with exposure on a direct risk basis rising by US$3.3 billion to reach US$56.78 billion for the second quarter. Increased borrowing also saw exposure on an ultimate risk basis rise from US$68.98 billion to US$69.70 billion.
The central bank attributed the change in part to a strengthened Chinese yuan, as well as investment in the wake of China's efforts to control COVID-19 in the first half of the year.
However, it added that recent debt problems faced by property developer Evergrande in China had reduced the willingness of Taiwan's banks to invest more.
Luxembourg came in third at US$44.66 billion on a direct risk basis, followed by Hong Kong (US$35.06 billion), Japan (US$33.46 billion), Australia (US$25.48 billion), the Cayman Islands (US$20.15 billion), Singapore (US$15.91 billion) and the United Kingdom (US$13.99 billion). Vietnam entered the top 10 for the first time at US$13.49 billion on a direct risk basis.
Taiwanese banks' exposure to the top 10 debtors reached US$372.27 billion by the end of June, accounting for 73.85 percent of the country's total outstanding international claims.
Source: Focus Taiwan News Channel