Taiwanese Banks’ U.S. Exposure Tops $200 Billion for First Time, Hits Record

Taiwan’s central bank uses its country-risk statistics for domestic banks to track claims on counterparties in individual markets and potential credit risks. The United States has long been their largest exposure because of its deep financial markets and strong demand for U.S. dollar assets. By contrast, banks have become more cautious about exposure to mainland China, reflecting a clear divergence in their overseas expansion and risk allocation. With U.S. exposure now above $200 billion, the figures carry greater significance for overall asset quality and cross-border risk management.

Central bank data for the fourth quarter of 2023 showed that Taiwanese banks’ exposure to the United States rose to $204.812 billion as of the end of December, exceeding $200 billion for the first time and setting another record. The United States remained the largest exposure for a 42nd consecutive quarter. Exposure to mainland China held at $49.891 billion, widening the gap between the two markets to a record $154.921 billion and showing that banks continued to concentrate funds in the U.S. market.