Move brings financial policymaking closer to economic ministries but raises concerns over regulatory efficiency, talent drain
South Korea's top financial policymaking body will relocate from Seoul to Sejong in the second half of 2027, extending the government's decentralization drive to financial regulation despite industry concerns over weaker oversight and a potential talent exodus.
The Financial Services Commission was included in the government's second round of central government agency relocations announced Tuesday, after being excluded from an initial list last month.
The FSC, which oversees financial policy, banking, capital markets and consumer protection, will move its 340-member workforce from the Government Complex Seoul to leased office space in Sejong. Its affiliated Korea Financial Intelligence Unit, with 80 employees, will also relocate.
The move brings financial policymaking closer to major economic ministries based in Sejong, potentially strengthening coordination on fiscal, macroeconomic and financial policies.
But it also raises questions about regulatory efficiency, as Seoul remains the center of Korea's financial industry, housing the Financial Supervisory Service, major banks, securities firms and financial associations.
Financial industry unions have warned that separating regulators from financial institutions could slow crisis response, increase operating costs and accelerate the departure of experienced personnel.
The concerns come amid broader opposition to the government's second wave of public institution relocations, aimed at reducing the concentration of jobs and economic activity in Greater Seoul.
A previous survey of 1,538 FSS union members found that 69.7 percent would consider changing jobs if the agency relocated, rising to 82.5 percent among employees under 40.
The FSC's confirmed move could also revive debate over relocating other financial institutions, including the FSS, Korea Deposit Insurance Corp., Korea Development Bank, Industrial Bank of Korea and Export-Import Bank of Korea. No relocation decisions have been announced for those institutions.
Critics point to the National Pension Service's fund management division, which moved to Jeonju in 2017 and subsequently struggled with employee retention, as a warning of the risks facing specialized financial institutions outside Seoul.
The government argues that clustering related public institutions in regional hubs could create jobs, attract businesses and support balanced economic growth.
To ease the transition, authorities plan to provide relocation and settlement assistance for affected civil servants, while considering temporary transportation support for those unable to move immediately.
The government will finalize the revised relocation plan following consultations and public hearings, with agencies moving in stages depending on office availability and preparations.
ch0221@heraldcorp.com