Financial sector stunned as hopes for 'economic capital Seoul' fade
FSS, state bank unions watch closely for second round of public institution relocations
69.9% of KDB junior staff say they would quit or change jobs if moved
Export-Import Bank union pursues right to strike, leaving open possibility of general walkout
The confirmation of the Financial Services Commission's relocation to Sejong has sent fresh tremors through the financial sector, unsettling institutions long named as candidates for a second round of public-body relocations — among them the Financial Supervisory Service, Korea Development Bank, Industrial Bank of Korea and Export-Import Bank of Korea. After President Lee Jae Myung floated a vision last month of Seoul as the country's economic capital and Sejong as its administrative capital, many in the financial industry had dared to hope they might stay in Seoul. The FSC's move to Sejong is now being read as an ominous signal for what lies ahead.
Following the government's announcement Tuesday that the FSC would relocate to Sejong, unions at the FSS and the three state-run banks said they were watching the second round of public institution relocation discussions closely. While the relocation of a central administrative body such as the FSC follows a separate process from that governing the FSS and state banks, the unions are on edge: the FSC's move has become reality just as the government is about to finalize which public institutions will be included in the second relocation round.
The FSS union is weighing its next steps. A union official said in a phone interview that it would monitor the government's follow-up moves after the FSC relocation announcement before deciding on a course of action.
Resistance within the FSS is already running high. Last month the union delivered to the government a petition signed by 1,679 employees expressing concern about a potential relocation. The union's central worry is that an exodus of specialized staff would weaken the FSS's capacity to examine and supervise financial companies.
The state banks — Korea Development Bank, Industrial Bank of Korea and Export-Import Bank of Korea — are also taking the FSC's move as a sensitive development. When President Lee outlined his vision last month of Seoul as the economic capital and Sejong as the administrative capital, the unions at the three banks had taken it as support for keeping them in Seoul. The FSC relocation announcement has left them rattled.
"It is hard to see how the FSC relocating would be particularly efficient," a KDB union official said. "We will also have to wait and see what decisions the government makes regarding the state banks." The official added that the union was in contact with counterparts at the Export-Import Bank and the FSS and could consider a joint response if necessary.
Within KDB, there is particular concern that a relocation would accelerate the departure of younger employees. In a recent union survey of 1,986 staff, 97.4 percent opposed moving the headquarters. Of all respondents, 57.4 percent said they would change jobs or resign if the headquarters moved — a figure that rose to 69.9 percent among junior-level staff aged 40 or under. Only 2.3 percent said they would relocate with their families to the new location.
"Among junior-level staff, nearly 70 percent indicated they would leave if the relocation went ahead," the official said. "Every time a new administration comes in, the relocation talk starts again, and employees are worn out by it."
The Export-Import Bank union is drawing a clear line between the FSC's relocation and any potential move by the state banks, but it too views the decision as a signal of what may come.
"We believe government ministries and financial institutions should be treated separately, but from our perspective this is a warning sign we need to treat with caution," an Export-Import Bank union official said. "We have consistently emphasized that finance is a clustering industry, and now that the FSC's relocation has become reality, we are watching with serious concern."
The Export-Import Bank union is already going through the procedures to secure the right to strike in preparation for the possibility that the bank could be included in the relocation list. "Our goal is to have options ready for when the list of institutions and their destinations is announced," the official said. "We are keeping a general strike on the table if it comes to that."
Concerns about staff attrition are also significant. According to the union, 34 percent of Export-Import Bank employees have six or fewer years of service, and in recent months about two employees per month — mostly younger staff — have been leaving. "Young employees are already leaving steadily, and there are signs of people preparing to move on, including job-search study groups," the official said. "If junior staff with six or fewer years of experience leave all at once, it could affect specialized policy finance work in areas such as defense and nuclear power."
Among the state banks, KDB's relocation destination has been discussed in the most concrete terms. The bank was previously designated for relocation to Busan, making it relatively likely to be sent there again if selected in the second round. The fact that both ruling and opposition politicians in Busan have pushed for KDB to be based there adds another variable. Any actual move of the headquarters would, however, require an amendment to the Korea Development Bank Act, which currently requires the bank to maintain its head office in Seoul.
No specific candidate cities have yet emerged for Industrial Bank of Korea or Export-Import Bank of Korea. Politicians in Busan, Daegu and North Jeolla Province have all lobbied for IBK, while Busan and other regions have pressed for the Export-Import Bank as well. Once the government specifies which public institutions will be relocated and where, competition among regions to attract the state banks is expected to intensify sharply.
Inside the FSC, meanwhile, the news of the Sejong move has been met with dismay. Staff had largely concluded after President Lee's "Seoul as economic capital" remarks that a regional relocation was unlikely. "I had made my own plans — including extending a jeonse loan — and now I may have to tear all of that up," one official said.
Separately, the Ministry of Interior and Safety announced Tuesday that 44 central government agencies and related bodies remaining in the greater Seoul area, covering 9,929 authorized positions, would be moved to Sejong in phases starting in 2027. The FSC is among the agencies that will use privately leased office space in Sejong and is scheduled to complete its move in the second half of 2027. The government cited the need to ease overcrowding in the capital region, promote balanced national development and build a Sejong-centered national governance structure.
The announcement covers the relocation of central administrative agencies and is separate from the second round of public institution relocations.
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