As Liu put it in a later interview, "Breaking through the scope of working capital loans was a revolutionary change at the time and triggered a great discussion in society about the role of banks.
That same year, the budgetary funding of corporate entities, which the development of the banking sector had made increasingly redundant, was eventually phased out.
From his position at the People's Bank, he fostered a major conference hosted by the People's Bank in 1986 with participation of U.S. securities industry luminaries, including New York Stock Exchange Chairman John J. Phelan Jr.[6] On that occasion, Deng gave Phelan a stock certificate of a Chinese listed company selected by Liu (Flying Happiness Acoustic Company), making him the first foreigner to formally own corporate equity in China.
In 1990, in the reactionary period following the Tiananmen Square events, Liu was asked by the State Council to investigate alleged irregularities on China's fledgling stock exchanges, and concluded that the situation did not justify outright termination of trading activity as some officials had advocated.
[7]: 20 In 1992, Deng Xiaoping's southern tour unlocked further explicit recognition of securities markets under the new slogan of socialist market economy; Liu was appointed by Vice Premier Zhu Rongji as the first-ever chairman of the China Securities Regulatory Commission upon its creation in October 1992,[1] and held the position until his retirement in March 1995.