‘Establishment of Regional Bank in Chungcheong Area’ Joint Promotion by Four Cities and Provinces in Chungcheong Region

[Asia Economy (Hongseong) Reporter Jeong Il-woong] Four cities and provinces in the Chungcheong region have agreed to join forces to establish a regional bank.

On the 8th, according to Chungnam Province, Chungnam Governor Yang Seung-jo, Daejeon Mayor Heo Tae-jung, and Sejong Mayor Lee Chun-hee signed an agreement on the joint promotion of the establishment of a Chungcheong regional bank at the Chungnam Provincial Library in Naepo New Town (pre-signed by Chungbuk Governor Lee Si-jong).

The agreement was centered on mutual cooperation among the four cities and provinces to realize financial decentralization and strengthen financial support for small and medium-sized enterprises and small business owners by establishing a Chungcheong regional bank.

To this end, each city and province plans to form a city/province resident task force and support its activities. They also plan to conduct joint research services and, based on the results, to concretize the establishment of the Chungcheong regional bank.

Additionally, any necessary matters for promoting the establishment of the Chungcheong regional bank will be decided through practical consultations among the four cities and provinces.

Previously, Chungcheong Bank, which played the role of a regional bank in the Chungcheong area, closed the following year due to the aftermath of the 1997 IMF bailout crisis, and since then, there has been no regional bank in the Chungcheong region.

As a result, the province judges that problems such as ▲regional financial and economic underdevelopment ▲outflow of regional funds outside the area ▲intensification of financial polarization due to concentration of finance in the metropolitan area have occurred.

Conversely, if a regional bank is established, it is expected to have effects such as ▲effective fundraising within the region ▲utilization of raised funds for regional economic development ▲activation of regional finance ▲loans to small and medium-sized enterprises using local ties and non-financial information.

Accordingly, in June, the province held an expert forum to prepare measures for revitalizing regional finance, officially promoting the establishment of the Chungcheong regional bank, and formed a research support group to conduct comprehensive research and investigation.

They are also concretizing the establishment of the Chungcheong regional bank through public opinion surveys of residents in the four cities and provinces, gathering opinions from the four cities and provinces, establishing a dedicated provincial organization, and including it as a strategic task of the Chungcheong Mega City.

Next year, they aim to form a pan-resident task force of the four cities and provinces to unite the capabilities of residents, conduct feasibility studies by specialized institutions, operate a working council among the four cities and provinces, recruit investors, and submit an application to the Financial Services Commission in 2023.

Chungnam Governor Yang Seung-jo emphasized the necessity of establishing a Chungcheong regional bank, saying, “As of 2019, the scale of regional fund outflow from Chungnam and Chungbuk ranks first and second nationwide, and funds that should be distributed to local residents and reinvested in the regional economy are unfortunately flowing out. Considering this situation, the only way to prevent income outflow and revitalize regional finance is to establish a regional bank.”