South Korea's Financial Supervisory Service (FSS) is facing a potential mass exodus of staff if its proposed relocation outside of Seoul proceeds. A union survey of 1,538 employees indicated that 69.7% intend to quit, and including those who answered "neutral," 85.6% would consider leaving. Among junior staff under 40 and professionals like certified public accountants and lawyers, this figure rose to over 90%. Specifically, 78.9% of accountants intended to quit (90.6% including neutral responses), and 94.2% of lawyers showed a "neutral or higher" intention to leave. This follows a trend seen at the Korea Development Bank, which experienced a doubling of voluntary departures to 97 and 87 in 2022 and 2023, respectively, when its relocation was debated.
The FSS union has strongly opposed the relocation plan, which is reportedly part of the government's second round of public institution relocations. They argue that Seoul is the appropriate location for the agency, with 99% of FSS employees concurring. The union points out that 91.6% of financial company headquarters, 88.3% of on-site inspection targets, and 81.4% of financial complaints are concentrated in the greater Seoul area. Relocation would lead to significant operational inefficiencies, forcing FSS staff to make frequent business trips back to Seoul for face-to-face meetings, licensing approvals, and on-site inspections.
Relocating the FSS could lead to substantial additional costs and weakened oversight. Projections suggest that the roughly 460 inspection staff might spend about half their working days traveling to Seoul. The FSS estimates that additional inspection costs alone could reach tens of billions of won annually. With approximately 75,000 external visitors annually, including 9,000 complainants and 66,000 financial firm officials, a move to Sejong would impose long-distance travel on tens of thousands of individuals. Increased supervision costs, currently funded 70% by financial firms through annual supervisory fees of approximately 350 billion won, would likely be passed on to consumers through higher lending rates and service charges.
The potential departure of highly skilled professionals is a major concern. Of the FSS's 2,190 current employees, 770 are accountants and lawyers, and this number rises to 1,050 when including actuaries, tax accountants, and doctoral degree holders. The widening pay gap between private financial firms and the FSS has already contributed to an outflow of talent, and relocation could trigger a significant loss of expertise. This loss, according to a FSS union official, would directly undermine consumer protection functions. The FSS Governor, Lee Chan-jin, has reportedly reaffirmed his opposition to the relocation in recent talks with the FSS labor union.
