Leveraged Stock Trading with 'Four Loans at Once'? Yang Jin-long acknowledges this description is slightly exaggerated, but the central bank is truly concerned about this

Taiwan's stock market has frequently rewritten new highs driven by the AI theme, but this has also sparked discussions about market overheating and even 'four loans at once' leveraged stock trading. Central Bank Governor Yang Jin-long today (9th) stated that the external description of 'four loans at once' is slightly exaggerated; the banking credit mechanism would not allow the same investor to simultaneously use multiple methods such as mortgages, consumer loans, securities lending, and stock pledges to heavily invest in stocks. What is truly worth noting is excessive credit expansion and leverage risk. He urged investors to 'invest only what they can afford' to avoid suffering excessive losses when the market reverses. Today, the Legislative Yuan's Finance Committee invited Yang Jin-long to give a special report and answer questions on 'central bank medium- and long-term response strategies and policy tools for multiple risks in the stock market, inflation, exchange rates, and the real estate market.' 'Four loans at once' can be misleading Legislators are concerned that over the past year, mortgage loans, stock financing, consumer loans, and stock pledges have all increased simultaneously, with the market even emerging with the term 'four loans at once,' describing investors entering the stock market through various loan channels. Yang Jin-long believes that the term 'four loans at once' is easy to mislead society and is somewhat exaggerated, making outsiders think that the same investor can simultaneously use multiple loans to heavily invest in the stock market. He explained that when banks approve loans, they will check the credit data center's information to assess the borrower's credit and overall debt situation, making it unlikely for the same borrower to simultaneously use mortgages, consumer loans, stock financing, and stock pledges to continuously increase investment in stocks. 'If it does exist, the proportion is not high, unless it is an investor with very abundant assets.' Yang Jin-long pointed out that while various types of loan balances have indeed increased, they mostly reflect different groups and different purposes of borrowing needs, not necessarily indicating that funds are all flowing into the stock market. It is also inappropriate to simply add up various loans and infer that the market generally has high leverage operations. AI momentum has fundamental support The central bank is more concerned about excessive credit expansion Although downplaying the 'four loans at once' phenomenon, Yang Jin-long still reminds that recently the market is permeated with the investment sentiment of fear of missing out (FOMO), especially some young investors prefer to use leverage to chase the stock market. Once the market continues to rise, profits can indeed be magnified, but if the market reverses, losses will also be magnified. He suggests 'invest only what you can afford,' and investors should establish risk awareness and should not over-leverage. As for the market's concern about whether the AI boom has formed a bubble? Yang Jin-long said that international institutions such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) have warned that AI-related asset valuations are high and pose risks, but the current stock market rise still has fundamental support, especially AI driving the growth of the electronics and telecommunications industry, indeed providing momentum for Taiwan's economic development. He frankly said that the central bank is not the competent authority for the stock market, nor is it a stock market expert, and it is not appropriate to directly comment on whether Taiwan's stock market is overheating, so he does not dare to say that the market is not overheating; the central bank is truly concerned about financial stability and whether credit is overly expanded due to market activity. Foreign institutions selling Taiwan stocks is profit-taking and does not necessarily mean they are bearish on Taiwan stocks Recently, foreign institutions have cumulatively sold more than 800 billion yuan worth of Taiwan stocks, raising market concerns about whether funds are withdrawing on a large scale. Yang Jin-long said that from an investment perspective, stop-loss and stop-gain are very normal, and foreign institutions' recent situation is closer to profit-taking. He also pointed out that the first quarter's foreign exchange market intervention data released by the central bank showed that the central bank net sold 12.5 billion US dollars in the first quarter, mainly related to foreign institutional fund flows, and in the second quarter, foreign institutions also continued to have partial outflow situations. The decrease in time deposits does not represent the central bank 'printing money' Market funds are actually tight In addition to stock market issues, the central bank's outstanding time deposits this year have decreased by more than 1 trillion yuan compared to the end of last year, which has also become a focus of legislative questioning. Market interpretation: the central bank has significantly reduced the issuance of time deposits, which is equivalent to 'printing money' and releasing a large amount of liquidity into the market, which is contradictory to the tight monetary policy. Yang Jin-long emphasized that the central bank's monetary policy stance has not changed. The decrease in outstanding time deposits is not due to the central bank actively injecting funds into the market, but because market funds are relatively tight, banks lack excess funds to apply for the central bank's time deposits, so the deposits naturally gradually decrease as they mature. Yang Jin-long further pointed out that this year, Taiwan's stock market is active, and corporate profits are good, leading to an increase in securities transaction taxes and business income taxes, with approximately 500 to 600 billion yuan in taxes remaining in the account opened by the Ministry of Finance at the central bank, equivalent to temporarily exiting market circulation. In addition, the central bank net sold 12.5 billion US dollars in the first quarter, also recovering about 400 billion yuan in liquidity. The two factors total approximately 1 trillion yuan, with a scale roughly equivalent to the decrease in outstanding time deposits. Therefore, the overall money supply has not increased, but market liquidity has been recovered, and the monetary policy remains tight. Yang Jin-long said that the central bank currently has no plans to invite banks to 'have coffee,' and in the future, it will continue to monitor the stock market, real estate market, and credit expansion situation, and will rollingly review relevant policy tools when necessary. More exclusive insider information from Wind Media: · Retail investors are borrowing crazy 'money into stocks'! The central bank warns of three phenomena and reminds banks to be aware of credit expansion risks · Taiwan's CPI rises higher than expected, is the inflation alarm ringing? The central bank analyzes the price situation, and imported inflation pressure is controllable · Don't let the AI craze cloud your judgment! The stock market hides 'double bubble' risks, and the unusual profit illusion may become a bomb