[News Focus] Financial regulator still not in list for Sejong relocation

By Kim Yon-se
  • Published : Jun 19, 2019 - 16:30
  • Updated : Jun 19, 2019 - 16:30

SEJONG -- It has been more than six years since the Ministry of Economy and Finance moved from Gwacheon, Gyeonggi Province, to Sejong Self-Governing City.

Nonetheless, some former functions of the ministry remained in Seoul after it handed over its financial industry policy authority to the Financial Services Commission in 2008, when the former Lee Myung-bak government took office.
(Graphic by Heo Tae-seong/The Korea Herald)

Since then, the FSC has been in charge of both supervisory policy and financial industry policy. The commission is still headquartered in Seoul.

President Moon Jae-in -- when he was a presidential candidate -- promised to push forward an overhaul of the FSC, citing the need for checks and balances in carrying out financial policies and oversight of financial firms.

Under his pledge, a research institute affiliated with the ruling Democratic Party had mapped out a plan to break up the FSC structure by spinning off the policy and supervisory functions.

The gist of the plan is to return the financial industry policy function to the Finance Ministry and entrust the supervisory function to the Financial Supervisory Service, which is not a government agency but an independent regulator.

According to the plan, most civil servants at the FSC were destined to work for the Finance Ministry in Sejong, with only a small number of decision-makers remaining in Seoul to look into proposals from the FSS and take disciplinary measures against rule-violating financial firms.

Many experts had also called for an overhaul. They pointed out that financial firms had faced burdensome “double investigations” by the government-based FSC and independent FSS.

Some civil servants at the FSC have expressed skepticism over the situation that their organization structure is being -- or will be -- swayed by Cheong Wa Dae.

The Moon administration has yet to implement its pledge, under which many FSC staff would likely be relocated to Sejong.

Last year, President Moon endorsed the movement of two ministries -- the Ministry of Interior and Safety and the Ministry of Science and ICT -- to Sejong, but not the FSC.

While some argue that the relocation of 18 central government ministries is more urgent, a civil servant in Sejong hit back at the idea, saying that “among those headquartered here are the Fair Trade Commission, the Anti-Corruption & Civil Rights Commission, the National Tax Service, the National Fire Agency and some others.”

A Sejong citizen questioned the development saying, “The Fair Trade Commission was included in the first relocation list in 2012 (from the Gwacheon, Gyeonggi Province to Sejong). Does the financial regulator FSC have legitimate reasons or convincing factors to stay in Seoul, unlike the antitrust regulator, the FTC?”

Apart from the FSC issue, the Sejong administrative-oriented city has yet to be completed since the city launched in July 2012.

After the Ministry of Interior and Safety joined the Government Complex Sejong earlier this year, 11 out of the 18 ministries of the central government are headquartered in the administrative-oriented city.

Only six would remain when the Ministry of Science and ICT relocates during the second half of this year.

Of the six, four are in Seoul (Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Unification, and Ministry of Gender Equality and Family) one in Gwacheon (Ministry of Justice) and one in Daejeon (Ministry of SMEs and Startups).

Many online commenters say the Ministry of Gender Equality and Family has the least convincing reason to stay in the capital. In addition, a citizen who identified himself as a Gyeonggi Province resident questioned, “Does the Ministry of Justice have to keep guard over the Government Complex Gwacheon alone?”
Civil servants welcome President Moon Jae-in, who visited the Ministry of Environment and the Ministry of Agriculture, Food & Rural Affairs at the Government Complex in Eojin-dong, Sejong to look into their 2019 policy directions on Dec. 18, 2018. (Yonhap)

Some had suggested that Cheong Wa Dae open a second presidential office at the Government Complex Seoul in Gwanghwamun, after three ministries (Foreign Affairs, Unification and Gender Equality) and the FSC leave the Seoul complex to relocate to Sejong. The Defense Ministry has its own building in Yongsan-dong, Seoul.

Moon made a pledge to do so during his election campaign, but Cheong Wa Dae has effectively scrapped the plan since then.

Meanwhile, some provincial cities are calling for the Moon government to push for the relocation of two state-funded banks -- the Korea Development Bank and the Export-Import Bank of Korea -- to support balanced regional development.

The scheme would require revision of the laws on state policy-oriented financial institutions.

By Kim Yon-se (