The 1907 United States financial crisis that prompted the creation of the Federal Reserve System was the Panic of 1907.
The panic began after a failed attempt to corner shares of United Copper Company. The resulting loss of confidence spread through banks and trust companies, producing withdrawals and a liquidity emergency. New York financier J. P. Morgan helped organize private support to stabilize the banking system.
The episode exposed the limits of a system without a permanent central bank. In response, Congress created the National Monetary Commission, whose work influenced the Federal Reserve Act of 1913 and the establishment of the Federal Reserve System.
The Federal Reserve was therefore not created during the panic itself. The crisis was the major political catalyst, while the institutional response took several years of debate and planning.