Dispersing policy banks would weaken financial competitiveness, unions say

Logos of Korea Development Bank, Industrial Bank of Korea and Export-Import Bank of Korea, the country's three major state-run policy banks. [Each company]
Logos of Korea Development Bank, Industrial Bank of Korea and Export-Import Bank of Korea, the country's three major state-run policy banks. [Each company]

The unions of Korea Development Bank, Industrial Bank of Korea and Export-Import Bank of Korea — the three major state-run policy banks being considered for a second round of public institution relocations — urged the government Monday to immediately halt any review of their transfer, one day before a planned joint rally. About 2,000 union members from the three banks are set to gather Tuesday to voice their opposition to the proposed moves.

The three unions issued a joint statement Monday calling on the government to "immediately stop reviewing the forced relocation of state policy banks, which would destroy financial competitiveness and deal a fatal blow to the national economy."

The unions criticized the government for pushing ahead with the relocation without adequately considering the role of policy banks or the distinctive nature of the financial industry. "This is proof that the current administration lacks even a minimum sense of 'priorities' and 'strategy' for the national economy," they said. "How can we compete with financial hubs like Hong Kong, London, Singapore, New York, Shanghai and Tokyo — cities that have succeeded through concentration — if we mechanically scatter our core financial institutions to every corner of the country?"

The unions maintain that policy finance institutions, which provide funding and financial support based on their networks with businesses and industries, should not be subject to relocation decisions made in the same manner as ordinary public institutions.

Korea Development Bank in particular oversees large-scale policy finance programs including the National Growth Fund and the Advanced Strategic Industries Fund, while Industrial Bank of Korea handles financing for small and medium-sized enterprises and small business owners. The Export-Import Bank of Korea provides financial support for export companies and economic security-related financing, the unions noted, arguing that each institution's role and financial network must be considered together.

"Artificially splitting apart and banishing to the regions the heart of this critical policy finance — which demands the highest level of expertise and global and nationwide networks — would be an economic catastrophe that shakes the very foundation of the funding ecosystem for the country's advanced industries and small businesses," the unions said.

The unions also said the government must first verify the outcomes of the first round of public institution relocations before proceeding. "If the government truly takes the failures of the first relocation as a lesson, it must squarely face the unique nature of finance as a 'high-value-added, agglomeration industry' that is fundamentally different from ordinary institutions," they said. "Pushing all public institutions wholesale into the regions without objective verification or scientific basis is nothing more than desk-bound administration repeating the mistakes of the past."

The three unions are also demanding that the government develop an "integrated financial agglomeration strategy" to position the country as a leading financial hub, alongside halting relocation discussions. They warned that if the government does not accept their demands, they will "mobilize every available means and method to resist any attempt at forced relocation."

The unions will hold a rally Tuesday at 7 p.m. near Korea Development Bank's headquarters in Yeouido, Seoul, under the banner of an all-out fight to block the regional relocation. About 2,000 people are expected to attend. Busan, Daejeon, Jeonju and Naju are among the cities currently being mentioned as potential relocation destinations for the banks.


rim@heraldcorp.com