In the wake of the Financial Crisis, China’s four-trillion-yuan stimulus package fueled by bank loans in 2009 spurred the rapid growth of shadow banking in China. This led to a compositional shift in local government liabilities toward bond financing, including Municipal Corporate Bonds.

On May 7, Zhiguo He, Professor of Finance at the Booth School of Business and Co-director of BFI's Macro Finance Research Program in China, discussed the recent rapid development of China’s bond markets and the intertwined shadow banking system, drawing on the striking similarities to the US experience during the national banking era (1863-1912).