Pohang, Gyeongju, and Gyeongsan Entrust Trillions but Gain Only Pennies... Treasury Cooperative Expenses Wiped Out at the 0.0% Level

Five Cities and Counties in Southeastern North Gyeongsang Fail to Clear 0.1% Threshold, Fall Short of Expectations
Gap of Up to Tenfold Compared with Yongsan District... Clear Disparities in Bargaining Power Even Within North Gyeongsang
"Financial Losses Caused by Bank Monopoly"... Growing Calls for a Complete Overhaul of Treasury Bank Selection System

Major local governments in the southeastern region of North Gyeongsang Province, including Pohang, Gyeongju, and Gyeongsan, have been found to receive a lower-than-expected share of so-called "treasury cooperative project expenses" from banks, with their share falling below the national average.

Despite depositing several trillion won in taxpayers' money, the actual contributions flowing back into the local community amount to no more than "the third decimal place," prompting calls for a fundamental review of how treasury banks are selected.

FY2024 Overview of Local Governments' Cooperative Project Expenses (processed from data submitted to the Ministry of the Interior and Safety). Provided by Nara Salim Research Institute.

According to an analysis titled "FY2024 Status of Local Government Treasury Banks Nationwide (Ratio of Treasury Cooperative Project Expenses to 2024 Revenue Settlement)" recently released by Narasallim Yeonguso, not a single local government in the southeastern region of North Gyeongsang Province recorded a cooperative project expense ratio exceeding 0.1% of its revenue.

Pohang has the largest revenue in the province at 3.6 trillion won, but its cooperative expense ratio was only 0.0419%.

Gyeongsan and Gyeongju recorded 0.0334% and 0.0293%, respectively, meaning they are effectively receiving only token levels of support.

Yeongcheon and Cheongdo also came in at 0.0189% and 0.0136%, showing markedly lower levels not only compared with the national average but also compared with other areas within the province.

This performance by local governments in the southeastern region stands in even starker contrast when compared with those in the Seoul metropolitan area and other cities and counties within the province.

In the case of Yongsan District in Seoul, the cooperative expense ratio reaches 0.3729% of revenue, allowing it to secure practical benefits nearly nine times higher than Pohang.

In some local governments, the contribution ratio exceeds 1% in certain fiscal years.

In effect, even when entrusting the same amount of budget, the benefits that local governments in the southeastern region of North Gyeongsang Province receive are only about one-tenth of those enjoyed by local governments in Seoul.

Disparities among different subregions are also clear within North Gyeongsang Province.

Gumi in the central region (0.0529%) and Uljin in the East Coast region (0.0345%) managed to secure relatively higher ratios, putting up a good fight, whereas larger local governments such as Pohang and Gyeongju have remained at a disadvantage in negotiations.

Local academia and civic groups point to a "monopolistic structure among financial institutions" and "limitations in evaluation indicators" as the causes of these outcomes.

The prevailing criticism is that it reflects a lack of administrative will to negotiate when a local government like Pohang, which has the capacity to mobilize over 3 trillion won in cash, is treated at the 0.04% level.

Song Yoonjung, senior researcher at Narasallim Yeonguso, said, "Local government deposits are the most stable source of income for banks, yet the interest and cooperative expenses that local governments receive are paltry," and suggested, "Beyond simply disclosing the total amounts, it should be mandatory to disclose the treasury bank's average balance and effective interest rate in order to induce genuine competition among banks."

Recently, at the central government level as well, issues such as the monopoly of local treasury banks and interest rate disparities have been formally placed on the agenda, signaling moves toward institutional reform.

Accordingly, local attention is focusing on whether local governments in North Gyeongsang Province, including Pohang, Gyeongju, and Gyeongsan, will be able to secure treatment commensurate with citizens' tax money in future treasury renewal processes.

A civic group representative stressed, "Transparent disclosure of interest rates and maximizing treasury income are obvious duties of local government heads," adding, "When selecting the next treasury bank, mechanisms that can promote competition, such as strengthening the scoring weight for cooperative project expenses, must be put in place."

Meanwhile, Narasallim Yeonguso has consistently pointed out the opacity of treasury bank operations since 2021.

In response, in August last year the president ordered the disclosure of treasury contract details at a "Government Finance Savings Meeting," and the Ministry of the Interior and Safety revised the Enforcement Decree of the Local Finance Act (to take effect on December 9, 2025) to establish the legal basis for disclosing "agreed treasury interest rates."

Currently, local governments nationwide are required to make their agreed treasury interest rates public, and going forward, the process of selecting treasury banks by local governments is also expected to be subject to strict citizen oversight based on transparent information disclosure.