The Bank Releases Financial Stability Report 2026

PRESS RELEASE Release Date: May 29, 2026

The Central Bank of the Republic of China (Taiwan) has released its 20th issue of the Financial Stability Report, which summarizes developments in domestic and international economic and financial conditions from early 2025 to April 2026 and analyzes risks that could affect Taiwan’s financial system.
The main findings of the Report are as follows:

Global and domestic macro-environments were mainly impacted by changes in U.S. trade policies and geopolitical conflicts

In 2025, despite the impact of U.S. tariff policies and international geopolitical conflicts, the global economy continued to grow steadily, and financial conditions shifted from tightening toward easing. Domestically, Taiwan experienced robust growth with the annual GDP growth rate reaching a nearly 15-year high, while inflation continued to trend downward. Overall revenues of listed continued to grow, with corporate financial structures remaining sound, although profitability diverged across major industries. Household debt burdens decreased slightly, while credit quality remained sound. As real estate market activity cooled, mortgage burdens eased marginally but still weighed on homebuyers.
Looking ahead to 2026, global economic growth is expected to slow and inflationary pressures may resurface amid geopolitical conflicts and shifts in U.S. trade policies. Taiwan’s economy is projected to continue growing steadily with moderate inflation. Nevertheless, heightened uncertainty surrounding the global economic outlook and increased financial market volatility may affect the operational prospects of the domestic corporate sector, the debt-servicing capacity of households, and market dynamics in the real estate sector. Accordingly, close monitoring of these developments is warranted.

Financial markets, institutions, and infrastructures in Taiwan continued to operate smoothly

Since early 2025, the outstanding amount of issuance and trading volume of bills and bonds have generally expanded. Stock indices have repeatedly hit record highs; however, market volatility and the risk of corrections should be monitored with caution. The NT dollar exchange rate against the US dollar experienced a short period of sharp appreciation, followed by a gradual depreciation and easing volatility. Overall, the foreign exchange market demonstrated dynamic stability.
In 2025, domestic banks continued to post record-high profits, supported by sound asset quality and adequate capital level. Life insurance companies experienced declines in both profits and average risk-based capital (RBC) ratios, while remaining exposed to higher market risks. Bills finance companies reported significant profit growth and sufficient capital levels, though their liquidity risks remained elevated. Meanwhile, major domestic payment systems continued to operate smoothly. Overall, Taiwan’s financial system remained stable.

The Bank will continue to take timely and appropriate measures to promote financial stability

Since early 2025, the Bank has kept the policy rates unchanged and conducted open market operations to manage liquidity conditions within the banking system. In March 2026, the Bank appropriately adjusted selective credit control measures and continued to adopt a flexible exchange rate policy to foster financial stability. The Financial Supervisory Commission (FSC) also continued to update regulations to ensure the sound development of the financial system.
Looking ahead, uncertainties stemming from geopolitical conflicts, developments in U.S. trade policies, the monetary policy paths of major economies, weak domestic demand and overcapacity issues in China, as well as climate change risks, could adversely affect global economic development and financial stability, thereby posing risks to Taiwan’s financial system. The Bank will continue to closely monitor these developments and their potential impact on Taiwan’s economy and the financial system, taking timely and appropriate measures to safeguard domestic financial stability.

The full English version of this Financial Stability Report will be released by the end of August 2026. In the interim, the Executive Summary is provided in the attachment for readers’ reference.