The London financial crisis triggered by Overend, Gurney and Company's failure in 1866 was the Panic of 1866.
Overend, Gurney and Company had grown from a bill-broking business into a major financial institution. It suspended payments on 10 May 1866 after suffering heavy losses, and the failure spread fear through London's banking system. The Bank of England responded by raising its discount rate and seeking a suspension of the Bank Charter Act's reserve restrictions.
The panic affected banks, companies, and railway finance. Stock prices fell sharply, and several financial firms failed or needed rescue. The crisis also demonstrated how a major intermediary could transmit losses across an interconnected credit market.
It is sometimes confused with the later Panic of 1873, which began amid railway speculation and banking failures in Europe and the United States. The 1866 episode is specifically associated with Overend, Gurney and Company and with a major Victorian-era banking panic in Britain.