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| An independent committee overseeing the development of financial centers holds a meeting in Seoul, Dec. 14. Courtesy of Financial Services Commission |
By Park Hyong-ki
Jeonju, North Jeolla Province is drawing attention on whether the city will be named and developed as the country's third financial center.
The Financial Services Commission (FSC) said Thursday that it is currently reviewing a research paper by the Korea Institute of Finance (KIF), analyzing the economic viability of Jeonju.
The regulator is expected to study the KIF paper over the next two weeks, and provide its opinion along with the research to an independent committee that oversees the development of local financial centers, including Yeouido in Seoul and Busan.
"We are reviewing the matter," said an FSC official.
This is in line with President Moon Jae-in's pledge to develop Jeonju as an innovative financial hub.
The state-run National Pension Service (NPS) has relocated its headquarters from Seoul to Jeonju.
However, analysts questioned whether having the NPS there serves its purpose, given Jeonju's low accessibility for global asset managers compared to Seoul. The market has been experiencing the effects of the relocation as a growing number of people have been leaving the NPS over the years.
"The government should be cautious about this. It may be good for the people of Jeonju. But the main objective of the NPS is to help the livelihoods of the elderly, not to spur regional development," said Yun Chang-hyun, an economist at the University of Seoul.
Foreign banks including the Bank of New York (BNY) Mellon and State Street Bank have decided to open offices there to be near their pension customer.
"We provide comprehensive financial services to the Korean institutional and wholesale marketplace including asset servicing, corporate trust, markets and treasury services. We will continue to look for opportunities to meet the changing and growing needs of our clients," BNY Mellon in Hong Kong said in a statement to The Korea Times.
BNY Mellon established its Seoul branch in 1988.
The regulator has indicated that it will review the Jeonju plan by looking at key criteria including whether the city has the potential to further advance the capital market and create jobs.
Also, the FSC will see whether the city can generate synergy with Yeouido and Busan, boost inbound foreign investment, and help spur financial technologies.
Under another plan for financial centers, the country seeks to develop Yeouido as a hub that provides "comprehensive financial services, and Busan for "specialized services" for logistics, shipping and shipbuilding.
However, FSC Chairman Choi Jong-ku said in a Dec. 21 press conference that it won't be easy coming up with a decision given the weak competitiveness of Busan and Yeouido.
Seoul ranked 33rd out of 100 cities in the Global Financial Centers Index compiled by the World Bank and the OECD in 2018. Busan ranked 44th.
When the Korea Exchange (KRX) relocated its headquarters to Busan in 2007, not a single brokerage followed the KRX. The stock market operator has an office building in Yeouido, and brokerages only have branches in Busan.
"We already face difficulties in running two separate financial centers in Seoul and Busan. Under the circumstances, we need to thoroughly review the feasibility of all centers," Choi said.
