FSC relocation to Sejong rattles staff; financial watchdog, state banks watch closely

First departure from Seoul since 2008 raises fears of junior staff exodus

FSS union: 'We will watch government's next moves'

69.9% of KDB junior staff say they would quit if bank relocates

The Financial Services Commission offices inside Government Complex Seoul in Jongno-gu, Seoul [Yonhap]

The confirmation that the Financial Services Commission will move to Sejong has set off a wave of unease inside the agency. Many staff had expected the FSC to stay in Seoul after President Lee Jae Myung last month outlined a vision of Seoul as an "economic capital" and Sejong as an "administrative capital," and the mood is now described as one of bewilderment. With the FSC's relocation settled, the Financial Supervisory Service and state-owned banks — both cited as candidates for a second round of public-institution relocations — are watching the government's next steps with growing anxiety.

The Ministry of Interior and Safety announced Tuesday its "Second Plan for the Relocation of Central Administrative Agencies," confirming the FSC will move to Sejong in the second half of 2027. A total of 44 central government agencies in the greater Seoul area, covering 9,929 positions, will relocate to Sejong in phases starting next year. It will be the first time the FSC has left Seoul since its establishment in 2008.

Inside the FSC, many staff said the decision caught them off guard. After the government said last month it would strengthen Seoul's economic, cultural and international functions — and after President Lee pledged to develop Seoul as an "economic capital" — many employees had concluded the agency would remain in the capital, sources said.

"I had made my own plans, including renewing my jeonse loan, and now I have to rethink everything," one FSC official said.

There are also concerns that the relocation could trigger a wave of departures, particularly among junior staff. Data submitted to People Power Party lawmaker Seo Il-jun by the FSC showed that 28 employees left the agency in 2024 and 19 last year. Through the end of June this year, 15 had already resigned.

Logos of Korea Development Bank, Industrial Bank of Korea and the Export-Import Bank of Korea [provided by each bank]

Concerns have also been raised that the physical distance between the FSC and Seoul's financial industry could hamper the agency's ability to respond to urgent issues and maintain close communication with the sector. "When a serious issue arises — like an AI-related cyberattack — you need to be in constant contact with industry officials," one financial sector official said. "Greater physical distance could limit the ability to respond immediately."

With the FSC's move confirmed, the FSS and the state-owned banks — whose own relocation status remains undecided — are closely monitoring the government's next moves. A representative of the FSS union said the union would "watch the government's actions following the FSC's Sejong relocation announcement and review how to respond." The FSS union last month collected 1,679 employee signatures opposing a regional relocation and submitted a petition to the government.

Korea Development Bank, Industrial Bank of Korea and the Export-Import Bank of Korea are also reacting with heightened sensitivity to the decision. Their unions had taken President Lee's "economic capital Seoul, administrative capital Sejong" framework last month as support for keeping the state banks in Seoul. With the FSC relocation now confirmed, anxiety over the banks' own futures is growing.

"It is hard to see how the FSC moving will be particularly efficient," a Korea Development Bank union representative said. "We will also have to wait and see what decision the government makes regarding the state banks." In a union survey, 57.4 percent of all KDB staff said they would quit or seek other employment if the bank's headquarters were relocated; among junior staff aged 40 or under, that figure reached 69.9 percent.

Yoon Seok-gu, chairman of the Korea Financial Industry Union, speaks at a press conference held in front of Cheong Wa Dae Sarangchae in Seoul in August to denounce what the union called a hasty attempt to relocate state-owned banks out of the capital. [Yonhap]

The Export-Import Bank of Korea union is already taking steps to secure the right to strike in anticipation of being included in a relocation list. "Our goal is to have options ready for when the list of institutions to be moved is announced," a union official said. "We are keeping a general strike in mind if necessary." With roughly 34 percent of the bank's staff having six or fewer years of service, the union said younger employees have also been leaving in growing numbers recently.

Among the state banks, a relocation of KDB to Busan is the most specifically discussed scenario. KDB was previously designated as a public institution to be moved to Busan, though carrying out the move would require amending the Korea Development Bank Act, which currently requires the bank to maintain its headquarters in Seoul. No destination has yet been identified for Industrial Bank of Korea or the Export-Import Bank.

The relocation of central government agencies to Sejong and the second round of regional relocations for public institutions are, however, separate plans. The government intends to finalize the list of financial public institutions and other bodies subject to relocation, along with their designated destinations, under a distinct process.

rim@heraldcorp.com
hyuk@heraldcorp.com