South Korea’s state-run financial institutions, facing an uncertain future under the government’s second round of public agency relocations, are launching collective action to oppose moving out of Seoul.
The labor unions of Korea Development Bank, IBK (Industrial Bank of Korea) and the Export-Import Bank of Korea will hold a “rally for an all-out fight to block relocation” in Seoul’s Yeouido district after work hours, according to financial industry sources. About 2,000 people are expected to attend, along with Rep. Kim Hyun-jung of the Democratic Party and Rep. Han Chang-min of the Social Democratic Party, both members of the National Assembly’s National Policy Committee.
The three policy banks, all headquartered in Seoul, are seen as candidates for the second round of public agency relocations expected to be announced next month. Possible destinations include Busan, Daejeon, Jeonju and Naju, with the plan reportedly favoring dispersal across several regions rather than a single site.
The policy banks’ unions argue that forced relocation would weaken their policy-financing capabilities and do nothing to help the competitiveness of the financial industry itself. In a joint statement the previous day, they said, “Artificially splitting up the heart of policy finance, which requires a high degree of expertise and networks, is an economic disaster,” adding that “the first round of relocations produced a population-dispersal effect of just 10%, making relocation a compulsive policy with no scientific basis.” They urged the government to “immediately halt any review of forced relocation.”
The union of the Korea Deposit Insurance Corp., which has been rumored to face a move to Sejong, will also hold a policy forum on the 11th to state its opposition to relocation. Drawing on research by the law firm LIN, Professor Lee Sang-hoon of Kyungpook National University and Professor Jeon Seon-ae of Chung-Ang University, the union plans to argue that Seoul — dense with banks, brokerages and other financial institutions — is the optimal location for carrying out financial stability functions.
The financial institutions complain of fatigue over relocation debates that recur with each administration, and they worry about a large-scale exodus of staff. At Korea Development Bank, the number of voluntary departures reached 97 in 2022 and 87 in 2023, when debate over moving its headquarters to Busan intensified. That is more than double the 37 and 46 recorded in 2020 and 2021. A Korea Development Bank union official said, “If relocation becomes a reality, we estimate that 20% to 30% of the entire workforce would resign.”
Younger employees showed a particularly high intention to leave, surveys found. In a June survey of 740 current employees by the Korea Deposit Insurance Corp. union, only 12% of those with less than five years of service and 13% of those with five to less than 10 years said they intended to keep working if the agency relocated. Among employees with 20 or more years of service, 53% said they would stay. The law firm LIN, which conducted the survey, said, “The shorter the length of service, the more sharply the intention to keep working fell,” adding that “there is significant concern about a gap in practical expertise.” Some 91% of the corporation’s employees responded that “keeping the headquarters in Seoul is reasonable.”
The financial institutions say that unless the review of relocation is halted, they will fight back using every available means, including a general strike and litigation. In particular, they judge that there is legal room to contest relocation, since the so-called Yellow Envelope Act (a revision to Articles 2 and 3 of the Trade Union Act) added “management decisions affecting working conditions” to the scope of matters subject to labor disputes. One union chairman said, “The relocation discussions are so highly classified they resemble a military operation,” adding, “It is difficult to accept relocation debates that give no consideration to individual members.”