UK's 60-Year Plan to Relocate Institutions Falls Short on Financial Sector

The UK's plan to relocate public institutions out of London has been in motion for over 60 years, starting from 1963. By 1972, 22,500 jobs had been moved to outlying areas, followed by another 19,000 between 1989 and 1993, and 21,500 more between 2004 and 2010. The British government has set a target of cutting 12,000 public-sector jobs in London and relocating them to the regions by 2032.

However, unlike South Korea, which aims to disperse financial regulators and policy finance institutions outside the capital region, Britain has kept its major financial institutions in London. The Bank of England (BOE), the Financial Conduct Authority (FCA) and the Financial Services Compensation Scheme (FSCS) are all headquartered in London.

France's relocation efforts have also been underway since 1955, but it too keeps its central bank, deposit insurance body (FGDR), and Caisse des Dépôts (CDC) in Paris. Experts point out that finance requires regulators, financial firms, and state-run financial companies to be clustered together.

The Financial Supervisory Service (FSC) is a collegial administrative body composed of the FSC chairman, vice chairman, standing commissioners, non-standing commissioner, vice minister of economy and finance, governor of the Financial Supervisory Service, president of the Korea Deposit Insurance Corporation, and senior deputy governor of the Bank of Korea. Moving to Sejong would bring it closer to the finance ministry but farther from other key institutions.

Financial firms that must coordinate closely with financial authorities in times of crisis are also concentrated in Seoul. The country's 8.3 million small and medium-sized enterprises are mainly concentrated in the capital region, with 52.6% based in Seoul, Gyeonggi, and Incheon. Deposit-taking banks' lending to small and medium-sized enterprises reached 641.1 trillion won in Seoul and Gyeonggi, or 56.3% of the total.