Taiwan Struggles to Unwind Credit Controls as Funds Cluster in AI, Stocks and Property

Taiwan’s central bank has introduced several rounds of selective credit controls to stabilize the property market. In recent years, however, bank credit has shifted sharply: rather than returning to the real economy, funds have become excessively concentrated in stocks, property and the booming AI manufacturing sector. This “capital magnet effect” has distorted resource allocation across industries and raised concerns about systemic risks in the financial system, making it difficult for the central bank to unwind its credit controls.

According to the latest report from the Central Bank of the Republic of China (Taiwan), total bank lending to the property sector increased by NT$1.3 trillion from June 2024 to May 2026, while stock-market-related lending rose by an even larger NT$1.87 trillion. AI-related industries accounted for nearly 80% of new manufacturing loans. Addressing the excessive concentration of funds, central bank Governor Yang Chin-long said in July 2026 that the bank would continue to closely monitor indicators including property-loan concentration and review its credit controls on a rolling basis.