Shin Hyun-song, governor of the Bank of Korea, delivers remarks at the second plenary session of the National Assembly’s Finance, Economy and Planning Committee on the 9th. Yonhap News
A so-called “jjirasi” (private information newsletter) containing plans to relocate financial public institutions to provincial areas has been circulating, putting the institutions named as relocation targets on high alert.
According to financial industry sources on the 14th, a plan to relocate financial public institutions to provincial areas, said to have been mentioned by a Ministry of Land, Infrastructure and Transport (MOLIT) official, was recently shared within the financial sector in the form of a private information newsletter. The document included the government’s plan to announce a relocation roadmap in September and to pursue related legal amendments in a package, along with placement plans for each institution.
Specifically, the plan called for the Financial Services Commission (FSC), the Financial Supervisory Service (FSS), the Korea Deposit Insurance Corporation, and the Bank of Korea (BOK) to move to Sejong; the Korea Investment Corporation (KIC) and the seven major mutual aid associations, including the Teachers’ Pension and the Military Mutual Aid Association, to Jeonju; Nonghyup Bank, Nonghyup Life Insurance, and Nonghyup Property & Casualty Insurance to Busan; and the National Agricultural Cooperative Federation to Naju.
As the document spread, the mood inside the BOK was one of unmistakable bewilderment. Relocating the BOK’s head office location would require an amendment to the Bank of Korea Act. As a non-capital special corporation with no state equity, and with staff who are private employees rather than civil servants, the BOK differs in nature from ordinary financial public institutions. Most central banks in major countries are also located in their capitals. Cases such as Germany’s central bank, located outside the capital, are difficult to compare directly given the special circumstances of a federal system, observers noted.
While the BOK has not issued an official position, internally the mood is to draw a line at the very idea of naming the central bank as a relocation target under the same standards applied to ordinary financial public institutions. “For the government to decide even the location of the central bank could lead to controversy over undermining the independence and neutrality of monetary policy,” a senior BOK official said. “It is difficult to judge it by the same standards as ordinary financial public institutions.”
The Council of Mutual Aid Association Labor Unions, representing the seven major mutual aid associations, rebutted the report on the same day, calling it “completely groundless.” The council said it had received an answer from the head of MOLIT’s external cooperation division that “no relocation target institutions or relocation destinations have been decided at all at this point.”