Which British financial institution failed in 1866, helping trigger the Panic of 1866?

Overend, Gurney and Company failed in 1866, helping trigger the Panic of 1866. The London discount house had grown into a major financial intermediary, but its conversion into a limited company and exposure to risky railway and infrastructure loans left it vulnerable.

When Overend, Gurney suspended payments on May 10, 1866, fear spread through London’s financial system. Share prices fell, banks faced runs, and the Bank of England used its lender-of-last-resort role after the government temporarily suspended the Bank Charter Act’s note-issue restrictions.

The panic affected markets beyond the failed firm because investors worried about liquidity and counterparty risk. It also contributed to the collapse of several financial companies and railway-related businesses.

The event is sometimes called the “Black Friday” panic in Britain, but that label should not be confused with later Black Friday market events. Overend, Gurney was a discount house rather than a modern commercial bank.