Which financial institution’s failure triggered the Panic of 1907 in New York?

The failure of the Knickerbocker Trust Company triggered the Panic of 1907 in New York.

Knickerbocker Trust suspended operations on October 22, 1907, after a failed speculation involving copper magnate F. Augustus Heinze and financier Charles W. Morse damaged confidence. Depositors then rushed to withdraw funds from other trust companies and banks.

The panic spread because the United States had no central bank capable of quickly supplying emergency liquidity. J. Pierpont Morgan organized private support for banks and trust companies and helped stabilize the financial system.

The episode helped persuade American policymakers that the country needed a permanent central banking institution. The Federal Reserve System was created in 1913. Knickerbocker Trust is sometimes confused with the later Federal Reserve, but the trust company was a private institution whose collapse exposed weaknesses in the pre-Federal Reserve system.