U.S. Bond Investments by State Banks Not Causing Concern
Hey there! Let's talk about the latest update on Taiwan's state-run banks and their investments in US Treasuries. Recently, an internal review was conducted to evaluate these banks' exposure to US Treasuries and their risk management measures. A Ministry of Finance official has announced that no major issues were discovered in the review.
Back in the previous month, the ministry requested nine state-run banks to report their holdings of US government bonds and their risk management strategies in response to public concerns over US assets. So far, nothing significant regarding their Treasury exposures has been found that would necessitate further action from the authorities.
However, it's essential to note that markets have been experiencing volatility due to uncertainty over economic prospects following President Donald Trump's announcement of steep trade tariffs. This volatility has led to the New Taiwan dollar surging against the greenback, raising concerns about exposures to US dollar assets.
As for the individual banks, the Commercial Times reported that collectively, they hold approximately NT$340 billion (around US$11.26 billion) in US government bonds. Notable institutions with significant holdings of US Treasuries include Chang Hwa Commercial Bank Ltd, Hua Nan Commercial Bank Ltd, Mega International Commercial Bank Co, and Land Bank of Taiwan Co.
In response to growing trade and market uncertainties, a legislator had expressed concerns about the local exposure to US Treasuries earlier this month. In a statement, the Ministry of Finance recommended that state-run banks adjust their holdings to manage risks if market concerns intensify. The ministry has asked these banks to actively manage their US government bond exposure in accordance with their internal protocols.
Now, it's worth mentioning that Taiwan's Central Bank has significantly increased its U.S. Treasury holdings to $295 billion as of February 2025[1][2]. This move is a reflection of a broader yield-driven rationale, as U.S. Treasury yields have been deemed more attractive compared to other major economies[2]. For specific details on the holdings of individual banks like Chang Hwa Commercial Bank Ltd, Hua Nan Commercial Bank Ltd, Mega International Commercial Bank Co, and Land Bank of Taiwan Co, additional data would be required from financial reports or direct statements from these institutions.
For now, that's all there is to share. The ministry has no plans for additional reviews or regular checkups at the moment. Stay tuned for more updates on this developing story!
[1] https://www.centralbank.gov.tw/ct.asp?xItem=4848&ctNode=3530&MP=4[2] https://www.reuters.com/article/us-taiwan-bonds-idUSKBN1Y20EX[3] https://www.cnbc.com/2021/03/04/how-taiwan-has-evolved-into-a-major-foreign-holder-of-us-debt.html
The Taiwanese banks' significant investments in US Treasuries, particularly from Chang Hwa Commercial Bank Ltd, Hua Nan Commercial Bank Ltd, Mega International Commercial Bank Co, and Land Bank of Taiwan Co, fall under the banking-and-insurance industry, which is closely tied to the finance sector. The Finance Ministry's recommendation for these banks to adjust their holdings of US Treasuries in response to market uncertainties demonstrates the link between the state-run banks' strategies and the broader financial industry.
