[Edaily Reporter Lim Yukyung ] “China is also fostering its financial industry centered on Shanghai, but it’s frustrating that only South Korea is pushing for decentralization to the provinces. This could cause South Korea’s financial industry to fall behind in global competitiveness.”

Union members from state-run banks, who were present at the first general strike rally held by the National Financial Industry Labor Union (Financial Union) on Sejong-daero in Gwanghwamun, Seoul, on the 4th, unanimously urged the government to completely withdraw its plan to relocate state-run banks and other public financial institutions to regional areas. Although the Financial Services Commission was temporarily excluded from the second list of central administrative agencies prioritized for relocation—announced by the government the previous day—the union maintains that it will continue its strong opposition unless an official announcement is made confirming its permanent exclusion.

According to the Financial Union’s estimates, 30,000 people gathered for the first general strike rally that day. Of these, union members from the so-called “three major state-run banks”—the Korea Development Bank, the Export-Import Bank of Korea, and IBK Industrial Bank of Korea—which have been mentioned as targets for relocation to the provinces, appeared to account for nearly 20 percent of the crowd. It is reported that a significant number of union members from each bank—more than 2,000 from KDB, more than 800 from KEXIM, and more than 3,000 from IBK—attended the general strike rally.

Union members from state-run banks argued that the relocation of financial public institutions to regional areas is a matter that affects the competitiveness of Korea’s financial industry. Their primary reason for opposing the relocation is the agglomeration effect in the financial industry.

An official from the Industrial Bank of Korea (IBK) union stated, “The financial industry can only demonstrate competitiveness when diverse resources are concentrated in one place,” adding, “Major financial hubs such as Singapore, Hong Kong, and New York are prime examples.” The official continued, “Given that financial companies are concentrated in Seoul, relocating only the policy banks to the provinces could weaken the competitiveness of the entire financial industry.”

They believe that a relocation to the provinces could have a direct negative impact on operations. The Korea Development Bank (KDB) union argued that the move could also affect the role of policy financial institutions. While KDB is a policy financial institution, it also generates profits through financial transactions in the market—such as project financing (PF), venture capital investments, and loans to large corporations—and channels these profits into regional investments or government dividends.

An official from the KDB union said, “If the headquarters and major departments move to regional areas, the distance from the market will increase, and opportunities to participate in deals may decrease,” adding, “This will lead to a decline in profitability and, consequently, may reduce the capacity for regional investment or government dividends.” The official also emphasized, “From the perspective of balanced regional development, it is more effective to maintain financial competitiveness in Seoul, generate profits, and invest those profits in regional areas, rather than simply relocating financial institutions to regional areas.”

The Korea Export-Import Bank (KEXIM) union pointed out that KEXIM holds approximately 1,000 meetings annually with overseas clients, noting, “If the headquarters moves to Sejong, Busan, or Naju, staff would have to travel back to Seoul to meet with these clients. It is questionable whether it is reasonable for the government to relocate an international financial institution to the provinces while incurring these administrative costs.”

Staff turnover and the resulting erosion of expertise are also reasons why the union at this policy-based bank opposes the relocation to the provinces. An official from the Export-Import Bank union expressed concern, stating, “If the relocation to the provinces takes place, there is a high likelihood that a significant number of young employees with five years or less of service will leave,” adding, “Even if new staff are hired, it is difficult to train them to a level capable of handling international financial operations in a short period, so staff turnover could directly lead to operational gaps.”

In a resolution issued that day, the Financial Workers’ Union argued that it is first necessary to verify what results the first round of relocations of public institutions to regional areas has achieved in terms of alleviating concentration in the Seoul metropolitan area and revitalizing local economies. Their reasoning is that it is premature to push for a second round of relocations while issues such as workforce exodus and living conditions in the host regions remain unresolved.

The hardline stance of the state-run bank unions is expected to continue even after this first general strike. In particular, the Industrial Bank of Korea (IBK)—where discussions on relocation to the provinces have been ongoing for the past three years—is considering separate branch-level negotiations and strikes even after the general strike ends. Furthermore, union officials from each of the three major state-run banks stated that they are keeping the option of joint action open if necessary.

In addition to blocking the relocation of financial public institutions to regional areas, the Financial Workers’ Union demanded the introduction of a 4.5-day workweek, expanded youth hiring, real wage increases, and a comprehensive overhaul of the total labor cost system.

Yoon Seok-gu, chairman of the Financial Workers’ Union, stated, “We have held more than 30 rounds of working-level and representative negotiations over the past five months since last April, but management has not provided a responsible response to our core demands,” adding, “Starting with this first general strike today, we will fight to the end for our working conditions and the economy of the Republic of Korea.”