Taiwan Central Bank Governor Warns of Stock-Market Leverage Risks, Assesses AI Bubble Concerns

As the global artificial intelligence boom fuels sharp swings in Taiwan stocks, some investors are borrowing through mortgages, margin loans and other channels to invest in the market, raising concerns about highly leveraged credit expansion. Taiwan's central bank is closely monitoring potential imbalances in the allocation of financial resources and the risk of settlement defaults. The issue has drawn close attention from markets and the public because excessive credit growth and uncontrolled leverage could trigger a systemic financial crisis if stocks reverse course.

Central Bank of the Republic of China (Taiwan) Governor Yang Chin-long appeared before the legislature's Finance Committee on July 9, 2026. Responding to lawmakers' concerns about the AI boom and stock-market leverage, Yang said AI development was supported by fundamentals and was not a bubble. He also rejected claims that the central bank was flooding the market with liquidity, stressing that it had absorbed about $12.5 billion through foreign-exchange sales in the first quarter and that NT$500 billion to NT$600 billion in tax revenue remained at the Ministry of Finance. Monetary policy was still relatively tight, he said, urging investors not to rely excessively on margin financing and to take credit-leverage risks seriously.