Banks Borrowing from TSMC? Central Bank Governor Says Heard It, Finds It Puzzling

(Central News Agency, Pan Tzu-yu, Taipei, June 10) The strong rise in Taiwan stocks has not only sparked an investment craze among the public but has also led to phenomena such as 'four loans under one roof' and the central bank's failure to fully issue certificates of deposit. During a legislative interpellation, lawmaker Kuo Kuo-wen pointed out market rumors that banks are borrowing money from TSMC. Central Bank Governor Yang Chin-long responded that he had indeed heard about it and found it 'very puzzling.'

The 364-day certificates of deposit auctioned by the central bank on June 3 recorded a shortfall for the first time in four years. This is widely interpreted as a result of the stock market margin trading boom tightening market funds.

Yang Chin-long explained to the Legislative Yuan's Finance Committee today that the rare under-subscription of central bank CDs was due to three factors: first, the tax payment season; second, the surge in AI-related corporate funding needs amid the artificial intelligence boom; and third, the hot Taiwan stock market drawing funds into equities.

Lawmaker Kuo Kuo-wen further pointed out that besides the 'four loans under one roof' phenomenon and the central bank's unsold CDs, there have been recent reports of banks borrowing from TSMC. This means banks are offering deposit rates to TSMC that are higher than their lending rates in order to secure TSMC's massive cash holdings.

Yang Chin-long stated frankly, 'I have heard about this.' He said he has discussed it with colleagues and finds it very puzzling. He attributed the main cause to TSMC's strong bargaining power, noting that TSMC is a globally renowned company.

Kuo Kuo-wen stated that these are all distortions in the financial market and that the central bank should not stand idly by. Yang Chin-long replied on the spot that the central bank would not stand idly by. (Editor: Pan Yi-ching) 1150610