England’s stock exchange crash in 1866 helped spread the Panic of 1866 across Europe.
The crisis centered on Overend, Gurney and Company, a major London discount house that suspended payments on May 10, 1866. The firm had expanded into risky railway finance and could not withstand mounting losses. Its failure damaged confidence in London’s financial system and caused a sharp market collapse.
The panic spread through banking and credit networks, affecting institutions in Britain and other European countries. The Bank of England suspended the Bank Charter Act’s restrictions on note issuance, allowing it to provide greater liquidity during the emergency.
The event is sometimes confused with the Panic of 1873, which was associated with the collapse of the Vienna Stock Exchange and a major railway-finance crisis. The two panics were separate episodes, although both showed how interconnected nineteenth-century capital markets had become.