Timeline of Financial Crises
Major financial crises worldwide, from the Dutch tulip collapse of 1637 and the bubbles of 1720 through banking panics and debt and currency crises to the 2008 financial crisis and the bank failures of 2023.
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- Social Sciences
- Events
- 33 events 1637 – 2023
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- by claude-opus-5-5
1637: Dutch tulip bulb prices collapse
Prices for tulip bulbs, above all rare varieties, traded largely through forward contracts in taverns in Haarlem and other Dutch towns, had soared from 1634 and collapsed in early February. Often called the first recorded speculative bubble, it was popularized by Charles Mackay's 1841 account, which drew on moralizing pamphlets; historians such as Anne Goldgar have found that few traders were ruined, most contracts were never honored and the Dutch economy was barely affected.
https://en.wikipedia.org/wiki/Tulip_mania1720: John Law's Mississippi Company collapses
The Scottish financier John Law had merged France's colonial trade monopolies, tax collection and his note-issuing Banque Royale into one company that took over the royal debt. Its shares rose from their 500-livre par value in the spring of 1719 to about 10,000 livres, then collapsed during the year amid inflation and a rush to turn banknotes into coin, falling to 1,000 livres by December. Law was dismissed and fled France.
https://en.wikipedia.org/wiki/John_Law%27s_Company1720: South Sea Bubble bursts in London
The South Sea Company, set up in 1711 to take over British government debt, persuaded holders of much of the national debt to swap it for its shares. The stock rose from about £100 to almost £1,000 within a year and fell to about £150 by the end of September, ruining many who had bought on credit. A parliamentary inquiry found fraud by directors and corruption in the cabinet, and John Aislabie, Chancellor of the Exchequer during the scheme, was imprisoned.
https://en.wikipedia.org/wiki/South_Sea_Company1772: Credit crisis spreads from London to Scotland
Alexander Fordyce, a partner in the London bank Neale, James, Fordyce and Down, lost heavily betting against East India Company shares and fled to France in June. Runs and failures spread through London and Scotland, where the Ayr Bank (Douglas, Heron and Company) collapsed on June 24, and reached Amsterdam by December. Adam Smith used the Ayr Bank as a cautionary example in "The Wealth of Nations" (1776).
https://en.wikipedia.org/wiki/British_credit_crisis_of_1772%E2%80%9317731792: Hamilton halts a bond panic in New York
The speculator William Duer, who had borrowed heavily trying to corner United States government bonds, defaulted in March, setting off a credit panic. Treasury Secretary Alexander Hamilton authorized bond purchases and had the Bank of New York lend against government securities at a penalty rate of 7%, tactics later likened to Walter Bagehot's rules for a lender of last resort. In May, New York brokers signed the Buttonwood Agreement, from which the New York Stock Exchange traces its origins.
https://en.wikipedia.org/wiki/Panic_of_17921825: Latin American bond boom ends in a British panic
London investors had poured money into shares and the bonds of newly independent Latin American states, and even of Poyais, a country invented by the Scottish adventurer Gregor MacGregor. Markets crashed from April and runs peaked in December; about one in ten banks in England and Wales failed, as the Bank of England raised its rate before belatedly lending freely. The episode has been called the first emerging-market crisis.
https://en.wikipedia.org/wiki/Panic_of_18251857: Panic spreads from New York around the world
The New York office of the Ohio Life Insurance and Trust Company suspended payments on August 24 as railroad securities fell, and the telegraph spread the panic across the United States; by October 13 all but one New York bank had suspended gold payments. Runs hit Liverpool, Glasgow and London, and on November 12 the British government let the Bank of England breach the Bank Charter Act's limit on notes not backed by gold. It is often called the first worldwide financial crisis.
https://en.wikipedia.org/wiki/Panic_of_18571866: Overend Gurney's failure sets off a London panic
Overend, Gurney and Company, the City of London's largest discount house, had floated as a limited company in 1865 to shore up its finances and suspended payment on May 10, setting off runs. The Bank of England let it fail but, with the Bank Charter Act suspended, lent heavily to other banks at 10%. Walter Bagehot's "Lombard Street" (1873) drew on such panics to argue that a central bank should lend freely against good collateral at a high rate.
https://en.wikipedia.org/wiki/Panic_of_18661873: Vienna crash and Jay Cooke failure spread panic
A boom in company promotions in Germany and Austria-Hungary ended when the Vienna Stock Exchange crashed on May 9, and about half its listed companies disappeared from trading. In the United States the bank Jay Cooke and Company, overcommitted to Northern Pacific Railway bonds, failed on September 18 and the New York Stock Exchange closed for ten days. The ensuing US contraction, which lasted 65 months to March 1879, is the longest identified by the National Bureau of Economic Research (NBER).
https://en.wikipedia.org/wiki/Panic_of_18731890: Bank of England organizes a rescue of Barings
Baring Brothers, one of London's leading merchant banks, had underwritten large Argentine issues and faced collapse when Argentina's boom ended in a debt crisis and political upheaval. Bank of England governor William Lidderdale obtained gold from the Banque de France and Russia and on November 15 announced a rescue: the Bank advanced £7.5 million and London banks pledged a £17.1 million fund against losses, averting a wider panic.
https://en.wikipedia.org/wiki/Baring_crisis1907: J. P. Morgan rallies bankers to halt a panic
A failed attempt to corner the stock of United Copper in October set off runs on New York trust companies; the Knickerbocker Trust Company suspended on October 22 after depositors withdrew about $8 million in under three hours. With no US central bank, J. P. Morgan pledged his own money and marshaled other bankers to supply cash. The crisis led to a monetary commission chaired by Senator Nelson Aldrich and ultimately to the Federal Reserve Act of 1913.
https://en.wikipedia.org/wiki/Panic_of_19071923: German mark collapses in hyperinflation
Germany had paid for the First World War largely by borrowing, and amid disputes over reparations its inflation turned into hyperinflation in 1922; after French and Belgian troops occupied the Ruhr in January, the government printed money to pay striking workers. By November a US dollar cost about 4.2 trillion paper marks, wiping out savings, until the Rentenmark, introduced on November 15, stabilized the currency. Historians still debate how far reparations were to blame.
https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic1927: Bank runs in Japan bring down the cabinet
Japanese banks still held discounted "earthquake bills" from loans made after the Great Kantō earthquake of 1923, and plans to retire them set off rumors and runs. The Bank of Taiwan, weakened by huge loans to the trading house Suzuki Shoten, closed temporarily and dozens of banks shut. After the Privy Council blocked emergency loans, Prime Minister Wakatsuki Reijirō resigned; his successor ended the panic with a three-week bank holiday and emergency loans, and big zaibatsu banks came to dominate Japanese finance.
https://en.wikipedia.org/wiki/Sh%C5%8Dwa_financial_crisis1929: Wall Street's great bull market crashes
The Dow Jones Industrial Average, which had peaked at 381.17 on September 3, fell nearly 13% on October 28 and nearly 12% on October 29, "Black Tuesday", after panic selling on October 24. The slide went on until July 1932, when the Dow closed at 41.22, 89% below its peak, and it did not regain its pre-crash high until November 1954. Economists still debate how much the crash contributed to the Great Depression.
https://en.wikipedia.org/wiki/Wall_Street_crash_of_19291931: Creditanstalt failure starts a European banking crisis
The Creditanstalt, which held about 27% of Austria's banking assets, announced on May 11 that it could not publish its accounts for 1930, setting off a run. The crisis spread to Germany, where the Danat-Bank failed on July 13 and the government closed the banks, and in September capital flight forced Britain off the gold standard. Bank failures rose in the United States as well, deepening the Great Depression.
https://en.wikipedia.org/wiki/European_banking_crisis_of_19311974: Herstatt Bank failure exposes currency settlement risk
West German regulators closed Bankhaus Herstatt of Cologne on June 26 after heavy foreign-exchange losses. Counterparties had paid Deutsche Marks but had not received the dollars due from its New York correspondent, exposing the risk of settling currency payments at different times. The failure helped prompt the creation of the Basel Committee on Banking Supervision.
https://en.wikipedia.org/wiki/Herstatt_Bank1982: Mexico halts debt payments, starting a regional crisis
Latin American governments had borrowed heavily from commercial banks recycling oil revenues, and sharply higher US interest rates after 1979 made the dollar loans hard to service. In August, Mexican Finance Minister Jesús Silva Herzog told US officials and the International Monetary Fund (IMF) that Mexico could not service its $80 billion debt; sixteen Latin American countries eventually rescheduled. The "lost decade" eased after the Brady Plan of 1989 led lenders to forgive about a third of the debt.
https://en.wikipedia.org/wiki/Latin_American_debt_crisis1987: Black Monday crash hits world stock markets
On October 19 the Dow Jones Industrial Average fell 508 points, or 22.6%, still its largest one-day percentage fall, after selling that began in Asia; Hong Kong shut its exchanges for four days and New Zealand's market eventually lost 60%. Computer-driven "portfolio insurance" selling is thought to have sped the fall. The Federal Reserve declared its readiness to serve as "a source of liquidity", the US economy was little affected, and exchanges later adopted circuit breakers.
https://en.wikipedia.org/wiki/Black_Monday_(1987)1989: Congress funds the savings and loan cleanup
High interest rates after 1979 left US savings and loan associations, or thrifts, paying more for deposits than they earned on fixed-rate mortgages; deregulation and regulatory forbearance then let insolvent thrifts gamble on riskier loans, and their deposit insurer went broke. The Financial Institutions Reform, Recovery and Enforcement Act created the Resolution Trust Corporation, which closed 747 thrifts by 1995; the cost to taxpayers was estimated at up to $124 billion.
https://en.wikipedia.org/wiki/Savings_and_loan_crisis1990: Japan's bubble economy bursts
After a late-1980s boom fueled by easy credit, Japanese share prices fell sharply from their December 1989 peak, followed by falling land prices. Bad loans burdened banks and helped prolong economic stagnation through the 1990s. The Nikkei 225 share index did not surpass its 1989 closing high until February 22, 2024.
https://en.wikipedia.org/wiki/Japanese_asset_price_bubble1992: Britain leaves the European Exchange Rate Mechanism
Currency traders, most famously George Soros, bet heavily against sterling, which they judged had entered the European Exchange Rate Mechanism (ERM) at too high a rate. On September 16, "Black Wednesday", the government spent billions from its reserves buying pounds, raised interest rates from 10% to 12% and announced a rise to 15%, then suspended its membership that evening. The Treasury later put the cost at about £3.3 billion, and Britain soon adopted an inflation target.
https://en.wikipedia.org/wiki/Black_Wednesday1992: Sweden guarantees its banks after a property bust
Sweden announced a broad guarantee for bank creditors during a crisis following financial deregulation and a property boom. The state took full ownership of Nordbanken and Gota Bank and transferred troubled assets to separate management companies. The Riksbank briefly raised its marginal lending rate to 500 percent to defend the krona, but let the currency float in November.
https://en.wikipedia.org/wiki/1990%E2%80%931994_Swedish_financial_crisis1994: Mexico devalues the peso in the Tequila crisis
Mexico defended its exchange rate through an election year by issuing short-term dollar-linked bonds called tesobonos, while an uprising in Chiapas and a presidential candidate's assassination unsettled investors. In late December the new government of Ernesto Zedillo devalued the peso and two days later let it float. Capital fled emerging markets, the United States organized a rescue of about $50 billion with the International Monetary Fund (IMF), and several Mexican banks collapsed.
https://en.wikipedia.org/wiki/Mexican_peso_crisis1997: Thailand floats the baht, starting the Asian crisis
After speculative attacks drained its reserves, Thailand abandoned its peg to the US dollar on July 2. Capital flight and currency collapses spread to Indonesia, Malaysia, the Philippines and South Korea, exposing heavy short-term foreign borrowing. Lenders led by the International Monetary Fund (IMF) mobilized about $118 billion for Thailand, Indonesia and South Korea, on austerity terms that economists such as Joseph Stiglitz criticized; in Indonesia the crisis helped force Suharto to resign in May 1998.
https://en.wikipedia.org/wiki/1997_Asian_financial_crisis1998: Russia defaults and hedge fund LTCM nearly collapses
Russia devalued the ruble and defaulted on domestic government debt on August 17, intensifying a global flight to safer assets. Losses nearly brought down Long-Term Capital Management (LTCM), a highly leveraged US hedge fund. The Federal Reserve Bank of New York organized discussions that led private financial firms to recapitalize the fund with $3.6 billion, without lending public money.
https://en.wikipedia.org/wiki/1998_Russian_financial_crisis2000: Dot-com bubble bursts
Valuations of internet and technology companies soared in the late 1990s; the Nasdaq Composite index peaked at 5,048.62 on March 10, then lost about 78% by October 2002 as unprofitable firms such as Pets.com and Webvan shut down. Accounting frauds at Enron and WorldCom, exposed during the downturn, led to the Sarbanes–Oxley Act of 2002, and the Nasdaq did not set a new closing high until April 2015.
https://en.wikipedia.org/wiki/Dot-com_bubble2001: Argentina freezes deposits and defaults
After years of recession under a peso pegged to the US dollar, Argentina restricted cash withdrawals in the corralito. Deadly unrest drove President Fernando de la Rúa from office, and an interim government announced a sovereign default in December. The currency peg ended in January 2002; the International Monetary Fund later estimated that output fell nearly 20 percent between 1998 and 2002.
https://en.wikipedia.org/wiki/1998%E2%80%932002_Argentine_great_depression2007: Subprime losses freeze bank funding markets
Rising defaults on US subprime mortgages undermined the securities built from them. On August 9 the French bank BNP Paribas suspended three funds, saying it could no longer value their US asset-backed holdings, and as interbank lending seized up the European Central Bank (ECB) made emergency loans. In September depositors rushed to withdraw savings from Northern Rock, a British mortgage lender reliant on short-term market funding, in the first run on a British bank in more than a century.
https://en.wikipedia.org/wiki/Subprime_mortgage_crisis2008: Lehman Brothers goes bankrupt
A week after the US government seized the mortgage giants Fannie Mae and Freddie Mac, the investment bank Lehman Brothers filed on September 15 for the largest bankruptcy in US history, with more than $600 billion in assets; the next day the Federal Reserve rescued the insurer American International Group (AIG). Money markets froze, Iceland's three big banks collapsed, and governments recapitalized and guaranteed banks, including through the $700 billion US Troubled Asset Relief Program (TARP).
https://en.wikipedia.org/wiki/Bankruptcy_of_Lehman_Brothers2010: Greece receives the first eurozone bailout
After Greece revealed in late 2009 that its budget deficit was far larger than reported, its borrowing costs soared; on May 2 euro area governments and the International Monetary Fund (IMF) agreed €110 billion in loans in return for austerity. Ireland, Portugal and Cyprus later needed rescues and Greece two more; pressure eased after European Central Bank (ECB) President Mario Draghi said on July 26, 2012, that the ECB was "ready to do whatever it takes to preserve the euro", a pledge backed in September by a bond-buying program.
https://en.wikipedia.org/wiki/Greek_government-debt_crisis2019: Lebanon's banks and currency collapse
Lebanon's banks had funded the state and a dollar peg held since 1997, relying on inflows the central bank sustained through costly "financial engineering". After protests began in October, banks closed for two weeks and then informally restricted dollar withdrawals; in March 2020 the government defaulted for the first time. The Lebanese pound lost most of its value, and the World Bank said the crisis likely ranked among the ten, possibly three, most severe worldwide since the mid-19th century.
https://en.wikipedia.org/wiki/Lebanese_liquidity_crisis2020: Pandemic panic crashes markets worldwide
As COVID-19 spread, world stock markets fell steeply and trading halts repeatedly interrupted US markets. The Federal Reserve cut interest rates to near zero, expanded securities purchases and opened emergency credit facilities, while other central banks also intervened. US stocks began recovering in late March despite the deep contraction in economic activity.
https://en.wikipedia.org/wiki/2020_stock_market_crash2023: Silicon Valley Bank collapses in a rapid run
Silicon Valley Bank, a California lender with about $209 billion in assets and mostly uninsured deposits from technology firms, had put much of its money into long-dated bonds that lost value as interest rates rose. After it announced a loss-making bond sale, depositors withdrew more than $40 billion on March 9 and regulators closed it the next day. Signature Bank failed days later, US authorities guaranteed both banks' deposits, and on March 19 Swiss authorities arranged UBS's takeover of Credit Suisse.
https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Bank