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[News Focus] Busan, North Jeolla in tug-of-war over financial hub title

Talks rekindled over relocating Korea’s key policy financing institutions from Seoul

With the next parliamentary election slated for April next year, some opposition lawmakers have recently rekindled long-stalled talks on relocating the nation’s key policy financing institutions -- the Bank of Korea and the three state-run banks -- to their respective constituencies.

The two regions in apparent rivalry are Busan and North Jeolla Province, the former celebrating its 10th anniversary of being designated as the country’s No. 2 financial hub and the latter hoping to be named the No. 3 hub as President Moon Jae-in had earlier promised.

Rep. Kim Kwang-soo of the minority Party for Democracy and Peace recently motioned a revision bill to relocate the headquarters of the Korea Development Bank and Export-Import Bank of Korea to North Jeolla Innovative City. The corresponding bill was signed by party members as well as by a number of the ruling Democratic Party of Korea members who are based in the southwestern Jeolla belt.

North Jeolla Innovative City, an administrative cluster lying across Jeonju and Wanju, is where President Moon pledged to promote as the nation’s next financial hub.

“The relocation of the two state-run banks (to North Jeolla Province) will alleviate the widening metropolitan-provincial gap and contribute to balanced national growth,” the lawmaker said.

In a counteraction, a group of ruling party members based in Busan are drafting a revision bill to allow the relocation of the two state-run banks to Busan.

Meanwhile Rep. Kim Du-kwan, whose constituency is in Gyeonggi Province’s Gimpo, has submitted a separate bill to allow each state-run bank to operate its headquarters according to its needs. Currently the BOK, KDB, Korea Eximbank, and Industrial Bank of Korea are mandated to keep their headquarters in Seoul.

Choi Jong-ku (Yonhap)
Choi Jong-ku (Yonhap)

The Financial Services Commission will hold a related task force meeting next month to decide whether North Jeolla Province should qualify as the country’s next financial hub.

But uncertainties persist on the regulator’s incoming decision, especially as its Chairman Choi Jong-ku recently expressed disapproval on financial capacity -- not only of North Jeolla Province but also of Busan.

“Since the designation in 2009 (as a financial hub city), Busan has attracted major financial institutions and hosted international conferences, but has fallen short of achieving quality growth,” Choi said in a recent visit to Busan.

Several institutions, including the Korea Exchange and the Korea Securities Depository, have been relocated to the southern port city, but disputes have continuously persisted on whether the designation had the intended policy effect.

The policymaker also kept mum over the designation issue when he visited North Jeolla Province earlier this month.

“As the regulator in charge of the (nation’s) financial administration, we cannot just follow regional demands, but should also consider social consensus,” Choi said.

Korea Eximbank Chairman Eun Sung-soo also hinted at his disapproval of the relocation idea, saying the state-run bank may only perform its role properly from the capital city.

Heated competition in the political circles has triggered backlash from the public and corresponding financial institutions.

“The relocation talks are in fact regional self-centeredness in the pretext of balanced growth,” commented the labor union of KDB in a recent statement.

By Bae Hyun-jung (