Which bank crisis in 1907 helped inspire the creation of the U.S. Federal Reserve?

The bank crisis in 1907 that helped inspire creation of the U.S. Federal Reserve was the Panic of 1907.

The panic began after a failed attempt to corner the stock of United Copper Company triggered a run on trust companies in New York. The problems spread through the financial system, and the Knickerbocker Trust Company collapsed after depositors demanded withdrawals. With no U.S. central bank then available to provide emergency liquidity, private financiers played a critical role.

J. Pierpont Morgan organized support for threatened institutions and helped prevent an even broader collapse. The episode convinced many policymakers that the United States needed a more permanent lender of last resort and a coordinated banking structure.

The Federal Reserve was not created immediately after the panic. Congress established the National Monetary Commission, whose work contributed to the Federal Reserve Act of 1913. The panic therefore influenced, rather than directly caused overnight, the central bank’s creation.