Cathay FHC President Lee: 'Four-Loan' Investors Face Margin Calls on Sharp Downturn, May Be in Debt for a Decade
Cathay Financial Holding President Chang-Keng Lee warned that investors using a combination of mortgages, car loans, personal loans, and stock margin loans—a phenomenon called 'four loans under one roof'—could face margin calls and a decade of debt if the market corrects sharply.
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- 📰 Published: June 12, 2026 at 15:48
- 🔍 Collected: June 12, 2026 at 16:00 (12 min after Published)
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(Central News Agency, Reporter Su Siyun, Taipei, 12th) Amid the Taiwan stock market investment frenzy, reports have emerged of a 'four loans under one roof' phenomenon among investors. Cathay Financial Holding President Chang-Keng Lee stated today that stock market fluctuations are normal, but if leverage is too high, 'even a slight market disturbance can cause serious trouble.' While young people can take risks, a significant market downturn could lead to margin calls, potentially leaving them in debt for the next decade.
Cathay Financial Holding held its 2026 annual shareholders' meeting today. As the Taiwan stock market repeatedly hits new highs, there has been recent discussion about investors entering the market using a combination of mortgages, car loans, personal loans, and stock margin loans—the 'four loans under one roof' approach. Media inquired about Lee's view on this phenomenon and whether the financial holding company has observed any securities default settlements.
Lee stated that while it's good to have fundamental support for investments, one must be aware of stock market risks, as ups and downs are normal. Investing in the stock market with proper risk control and starting financial planning early is beneficial. However, if leverage is too high, even a slight market disturbance can cause significant problems. Although young people can bear risks, if they are truly using the 'four loans under one roof' approach, a significant market downturn could lead to margin calls, potentially leaving them in debt for the next decade.
Regarding the scale of the 'four loans under one roof' phenomenon, Lee explained that the Joint Credit Information Center's mechanism primarily covers bank mortgages and personal loans, but does not include data on securities borrowing or insurance policy loans. Therefore, it is impossible to understand the full picture of a customer's cross-industry borrowing. Furthermore, while the bank, insurance, and securities subsidiaries of the financial holding company each have their own credit control limits, it is unclear whether the total combined amount exceeds the overall limit.
He noted that while the financial holding company might be able to estimate a customer's situation through data, if the customer has not consented to joint marketing, access to relevant data is restricted, making it difficult to assess.
On financial institution risk management, Lee stated that Taiwan has had very low interest rate spreads in recent years, leading financial institutions to be more cautious in risk management, with good non-performing loan management. If the market were to fall by 20-30%, individual cases with high leverage would indeed encounter problems. However, from an overall market perspective, the risk management of financial institutions should be adequate.
During the shareholders' meeting, a shareholder asked how Cathay Financial Holding maintains long-term operational stability. Lee responded that looking at Cathay FHC's structure, the subsidiary with the most volatile financial reports in the past was Cathay Life Insurance, while other subsidiaries have shown stable growth. The life insurance sector previously had to monitor three major factors: interest rate levels (closely related to policy liability costs), exchange rate risk (the life insurance sector used to spend about 1% of total assets on hedging annually), and capital market fluctuations.
Lee said that among these three variables, with the insurance industry transitioning to IFRS 17 and adopting the currency amortization method this year, the impact of interest rate and exchange rate fluctuations has become more moderate. With two of the three factors now stabilized, he expects the company can create a more stable growth environment for shareholders in the future. (Editor: Pan Yijing) 1150612
Cathay Financial Holding held its 2026 annual shareholders' meeting today. As the Taiwan stock market repeatedly hits new highs, there has been recent discussion about investors entering the market using a combination of mortgages, car loans, personal loans, and stock margin loans—the 'four loans under one roof' approach. Media inquired about Lee's view on this phenomenon and whether the financial holding company has observed any securities default settlements.
Lee stated that while it's good to have fundamental support for investments, one must be aware of stock market risks, as ups and downs are normal. Investing in the stock market with proper risk control and starting financial planning early is beneficial. However, if leverage is too high, even a slight market disturbance can cause significant problems. Although young people can bear risks, if they are truly using the 'four loans under one roof' approach, a significant market downturn could lead to margin calls, potentially leaving them in debt for the next decade.
Regarding the scale of the 'four loans under one roof' phenomenon, Lee explained that the Joint Credit Information Center's mechanism primarily covers bank mortgages and personal loans, but does not include data on securities borrowing or insurance policy loans. Therefore, it is impossible to understand the full picture of a customer's cross-industry borrowing. Furthermore, while the bank, insurance, and securities subsidiaries of the financial holding company each have their own credit control limits, it is unclear whether the total combined amount exceeds the overall limit.
He noted that while the financial holding company might be able to estimate a customer's situation through data, if the customer has not consented to joint marketing, access to relevant data is restricted, making it difficult to assess.
On financial institution risk management, Lee stated that Taiwan has had very low interest rate spreads in recent years, leading financial institutions to be more cautious in risk management, with good non-performing loan management. If the market were to fall by 20-30%, individual cases with high leverage would indeed encounter problems. However, from an overall market perspective, the risk management of financial institutions should be adequate.
During the shareholders' meeting, a shareholder asked how Cathay Financial Holding maintains long-term operational stability. Lee responded that looking at Cathay FHC's structure, the subsidiary with the most volatile financial reports in the past was Cathay Life Insurance, while other subsidiaries have shown stable growth. The life insurance sector previously had to monitor three major factors: interest rate levels (closely related to policy liability costs), exchange rate risk (the life insurance sector used to spend about 1% of total assets on hedging annually), and capital market fluctuations.
Lee said that among these three variables, with the insurance industry transitioning to IFRS 17 and adopting the currency amortization method this year, the impact of interest rate and exchange rate fluctuations has become more moderate. With two of the three factors now stabilized, he expects the company can create a more stable growth environment for shareholders in the future. (Editor: Pan Yijing) 1150612
FAQ
What is the 'four loans under one roof' phenomenon?
It refers to investors using a combination of mortgages, car loans, personal loans, and stock margin loans to invest in the stock market.
What is Lee's main warning?
He warns that a significant market downturn could lead to margin calls, potentially leaving investors in debt for the next decade.
Can Cathay FHC assess a customer's total borrowing?
Lee stated that data from the Joint Credit Information Center is limited, and it is difficult to get a full picture without customer consent.