The politics of last resort lending and the Overend & Gurney crisis of 1866

News of the insolvency Overend, Gurney, & Company on 10 May 1866 generated a scramble for funds in City London and urgent appeals to Bank England. The banking panic triggered by collapse prominent British discount house became one Bank's most tumultuous modern crises. This article investigates politics liquidity provision during crisis, ensuing months financial stringency. By assessing correspondence, speeches, publications Governors, figures, journalists, finds that evolving approach crisis lending was decisively shaped its commercial objectives prolonged struggle preserve autonomy. When confronted with adopted pragmatic stance towards market, which accommodated credit needs without sacrificing either privileged legal status or shareholders’ interests. Its Governors’ rhetorical pursuit ‘constructive ambiguity’ post-crisis succeeded both limiting moral hazard consolidating discretionary powers.