The 1907 U.S. financial crisis that helped prompt creation of the Federal Reserve System was the Panic of 1907. A failed attempt to corner United Copper shares damaged confidence and contributed to runs on banks and trust companies.
J. P. Morgan organized private support for the financial system, helping stabilize institutions when the United States lacked a central bank able to act as lender of last resort. The episode exposed weaknesses in the country's fragmented banking structure.
Congress established the National Monetary Commission to study reform, and the Federal Reserve Act followed in 1913. The Federal Reserve did not exist during the Panic of 1907; its later creation was one of the crisis's most important institutional consequences.