Taiwan Stock Market Boom Crowding Out Bank Loans? FSC: Closely Monitoring Fund Flows

Taipei, July 8 (CNA) - With the Taiwan stock market experiencing robust trading, legislators have raised concerns about the significant decrease in outstanding central bank certificates of deposit, indicating increased market liquidity. They are inquiring about how to channel these funds towards the real economy. Financial Supervisory Commission (FSC) Chairman Peng Jin-lung stated that they are closely monitoring fund flows. During this period, bank deposits have increased substantially, and lending has also risen in tandem. However, most of these funds have flowed into corporate lending. The FSC is maintaining close communication with the Central Bank.

The Legislative Yuan's Finance Committee today reviewed the Central Deposit Insurance Corporation, the Financial Supervisory and Management Fund, and the Insurance Business Development Fund, all under the purview of the FSC. FSC Chairman Peng Jin-lung was invited to attend and respond to inquiries.

Kuomintang legislator Lin Te-fu pointed out that the recent surge in the Taiwan stock market has led to increased demand for funds, even to the extent of "four loans for one person" phenomena. He expressed concern that the demand for funds in the stock market might be crowding out loans for industries and general purposes. Furthermore, the significant decrease in outstanding central bank certificates of deposit suggests increased market liquidity. Therefore, he is concerned about how the central bank will guide the released funds towards the real economy, rather than allowing them to continuously flow into the stock market, thereby enabling banks to have more funds to support non-stock market transactions.

Peng Jin-lung stated that they are closely monitoring relevant fund flows. During this period, bank deposits have increased substantially, and lending has also risen in tandem. However, most of these funds have still flowed into corporate lending. The FSC is maintaining close communication with the Central Bank, and discussions were held with the Central Bank yesterday. The two ministries will jointly address this matter. (Edited by: Chang Liang-chih) 1150708

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