The Bund lies north of the old, walled city of Shanghai. It was initially a British settlement; later the British and American settlements were combined in the International Settlement. Magnificent commercial buildings in the Beaux Arts style sprung up in the years around the turn of the 20th century as the Bund developed into a major financial center of east Asia. 

By the 1940s, the Bund housed the headquarters of many, if not most, of the major financial institutions operating in China, including the "big four" national banks in the Republic of China era. However, with the Communist victory in the Chinese civil war, many of the financial institutions were moved out gradually in the 1950s, and the hotels and clubs closed or converted to other uses. The statues of colonial figures and foreign worthies which had dotted the riverside were also removed.

In the late 1970s and early 1980s, with the thawing of economic policy in the People's Republic of China, buildings on the Bund were gradually returned to their former uses. Government institutions were moved out in favour of financial institutions, while hotels resumed trading as such. Also during this period, a series of floods caused by typhoons motivated the municipal government to construct a tall levee along the riverfront, with the result that the embankment now stands some 10 metres higher than street level.