Which London bank’s collapse helped trigger the Panic of 1866, a major Victorian-era financial crisis?

The collapse of Overend, Gurney and Company helped trigger the Panic of 1866. The London discount house suspended payments in May 1866 after losses from railway and other speculative investments overwhelmed its finances.

Overend, Gurney had been one of Britain’s most important financial intermediaries. Its failure caused a run on banks and discount houses, froze credit, and pushed the Bank of England to act as lender of last resort by suspending the Bank Charter Act’s reserve restrictions.

The panic illustrated the danger of maturity mismatch: financial firms could hold long-term or risky assets while owing money that depositors and counterparties could demand quickly. It also helped establish expectations that the central bank might intervene to contain systemic banking stress.