As government pursues second round of public institution relocations, central bank notes no major economy has moved its central bank headquarters out of its financial hub; Bank of Korea Act currently designates Seoul as home base; Democratic Party lawmaker files bill to move bank to North Jeolla Province

The Bank of Korea headquarters in Jung-gu, Seoul. [Yonhap]
The Bank of Korea headquarters in Jung-gu, Seoul. [Yonhap]

As the government pushes ahead with a second round of public institution relocations out of the greater Seoul area, the Bank of Korea said no major economy has ever moved its central bank headquarters from the capital to a regional city — and that even where government ministries have relocated, central banks have stayed in the city with the most developed financial sector. While the Bank of Korea stopped short of taking an explicit position on its own relocation, the remarks are widely read as signaling that it should remain in Seoul.

In a written response obtained through the office of People Power Party lawmaker Lee Jong-wook, a member of the National Assembly's Finance and Economy Planning Committee, the Bank of Korea said it understood the government was weighing the relocation of public institutions with comprehensive consideration of the impact on national development, but added that it was difficult to state a specific position while no formal plan had been announced.

On the question of whether any overseas central bank had moved its headquarters to a regional city, the Bank of Korea said flatly: "Among major economies, there is no case of a central bank headquarters being relocated from the capital to a regional area." It acknowledged that Nigeria, Myanmar and Kazakhstan had moved their central bank headquarters, but said all three cases involved the countries relocating their capitals — meaning the banks simply followed a new seat of government, a fundamentally different situation from moving a central bank out of a capital that remains in place.

The Bank of Korea went further, saying that central bank headquarters in most major economies are located in the capital, which is also the financial hub, and that even where the headquarters is not in the capital, it is situated in the city with the highest level of financial industry development.

The Deutsche Bundesbank is the most frequently cited example. When Germany moved its capital from Bonn to Berlin, the Bundesbank stayed in Frankfurt, the country's financial center. Bank Negara Malaysia similarly remained in Kuala Lumpur — the capital and financial hub — after government ministries relocated to the administrative capital Putrajaya. The logic, as widely interpreted, is that the Bank of Korea should stay in Seoul regardless of whether other government agencies or public institutions move to Sejong.

On Sept. 3, the government announced the principles and direction for the second round of public institution relocations, targeting more than 350 public institutions in the greater Seoul area. The plan calls for a leading group of institutions to begin relocating in 2027, with the specific list of institutions and destinations to be finalized in the fourth quarter of this year.

The prevailing view has been that the Bank of Korea is unlikely to be relocated. The bank is classified not as a public institution under the Act on the Management of Public Institutions, but as a special non-capital corporation — a status designed to protect the autonomy and neutrality of monetary and credit policy. Its employees are not civil servants. The Bank of Korea Act explicitly designates Seoul as the location of its headquarters, meaning any relocation would require amending the law. There are also concerns that moving the bank to Sejong, where government ministries are concentrated, could fuel debate over the independence and neutrality of monetary policy.

That said, the Bank of Korea is not entirely in the clear. When the government announced the second round of public institution relocations, one of its five guiding principles was minimizing the number of public institutions that remain in the greater Seoul area. The government said institutions with no compelling reason to stay in the capital would be moved to regional areas without hesitation.

Lawmakers representing regional constituencies have also been pressing for the Bank of Korea's relocation. Democratic Party of Korea lawmaker Lee Sung-yoon, who represents a district in Jeonju, North Jeolla Province, filed a bill Monday to amend the Bank of Korea Act that would change the location of the bank's principal office from Seoul to North Jeolla Province. The stated aim is to disperse financial functions and specialized personnel concentrated in the greater Seoul area and to strengthen the financial industry base in North Jeolla Province.


kimstar@heraldcorp.com