News of the insolvency of Overend, Gurney, & Company on May 10, 1866, sparked a rush for funds in the City of London and urgent appeals to the Bank of England. The banking panic triggered by the collapse of the major British discount store became one of the most tumultuous modern banking crises. The Panic of 1866 was an international financial recession that accompanied the bankruptcy of Overend, Gurney & Company in London and the abandonment of the silver standard in Italy. In Great Britain, the economic impacts are held partially responsible for the public agitation for political reform in the months preceding the Reform Act of 1867. The crisis led to a sharp rise in unemployment to 8% and a consequent decline in wages across the country. The crisis was ultimately resolved by the Bank of England’s willingness to serve as the “lender of last resort” and thus act as a last resort.
