The 1866 financial crisis triggered by Overend, Gurney and Company’s collapse was called the Panic of 1866.
Overend, Gurney and Company was a major London discount house that had expanded into riskier railway financing. It suspended payments on 10 May 1866 after losses became impossible to conceal. The failure damaged confidence in banks and businesses, producing a run on British financial institutions.
The Bank of England responded by raising its discount rate and, with government authorization, lending more freely than the legal reserve framework normally allowed. This helped contain the immediate banking panic, although many companies failed and the crisis affected markets beyond Britain.
The Panic of 1866 is sometimes confused with the later Panic of 1873, which began amid financial turmoil in Vienna and spread internationally. The 1866 episode is especially associated with Overend, Gurney and the use of emergency central-bank support.