The 1866 financial crisis caused by Overend, Gurney and Company’s collapse is called the Panic of 1866.
Overend, Gurney and Company was a major London discount house, handling bills of exchange and short-term credit. Its failure on 10 May 1866 triggered a rush to withdraw money from banks and financial institutions. The London Stock Exchange fell sharply, and trading was suspended for several days.
The panic spread beyond Britain. Financial stress reached parts of Europe and Latin America, although the effects differed by country. The Bank of England responded by seeking authorization to exceed the ordinary limits of its note issue, helping stabilize the banking system.
The event is sometimes confused with the Long Depression, which followed the Panic of 1873. The 1866 crisis was earlier and centered initially on London’s financial system. It also helped demonstrate the importance of a central bank acting as lender of last resort.