Which bank’s 1866 collapse triggered the Panic of 1866 in Britain and a major London stock-market crash?

Overend, Gurney and Company’s collapse triggered the Panic of 1866 in Britain and a major London stock-market crash.

Overend, Gurney was a prominent London discount house, a financial institution that bought and sold short-term credit instruments. It had grown from a respected bill broker into a large lender, but accumulated risky railway and other investments. When confidence weakened, depositors and creditors demanded payment that the firm could not provide.

The company suspended payments on 10 May 1866. Its failure spread fear through London’s financial markets, causing a sharp fall in share prices and a run on banks. The Bank of England initially hesitated before acting as lender of last resort, then provided emergency support to stabilize the banking system.

The panic did not originate from a single stock-market trading day in the way the 1929 crash did. It was a broader credit crisis centered on a major financial intermediary. The episode helped shape later central-bank policy and is often discussed as an early example of financial contagion.