Panic 1825

business cylces

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Panic of 1825 1

Panic of 1825
The Panic of 1825 was a stock market crash that started in the Bank of England arising in part out of speculative
investments in Latin America, including the imaginary country of Poyais. The crisis was felt most acutely in England
where it precipitated the closing of six London banks including Henry Thornton's bank and sixty country banks in
England, but was also manifest in the markets of Europe, Latin America, and the United States. An infusion of gold
reserves from Banque de France saved the Bank of England from complete collapse.
The panic has been referred to as the first modern economic crisis not attributable to an external event, such as a war,
and thus the start of modern economic cycles.

Bank Improvements
Seventy banks failed. The current view puts a lot of the fault of the crash on the banks for not doing simple due
diligence. The bank of England (a for profit bank at the time), was blamed for not policing the banks. The Bank of
England raised the lending rate to protect its investors, instead of lowering it to protect the public. The self interest of
the Bank of England caused additional failures, and England was saved from financial disaster by France. Later
policies were changed. [1]

In fiction
An historical novel by Stanley J. Weyman, Ovington's Bank, is centered on the Panic of 1825.

References
• Bordo, Michael D. Commentary May/June 1998. St. Louis Federal Reserve Review.[2]
• Fetter, Frank W. A Historical Confusion in Bagehot's Lombard Street Economica, New Series, Vol. 34, No. 133
(Feb., 1967), pp. 80–83. [3]
• Haupert, Michael (1997). "Panic of 1825". In Glasner, David; Cooley, Thomas F., eds. Business cycles and
depressions: an encyclopedia. New York: Garland Publishing. pp. 511–13. ISBN 0824009444.

References
[1] http:/ / research. stlouisfed. org/ publications/ review/ 98/ 05/ 9805mb. pdf
[2] http:/ / research. stlouisfed. org/ publications/ review/ 98/ 05/ 9805mb. pdf
[3] http:/ / links. jstor. org/ sici?sici=0013-0427(196702)2%3A34%3A133%3C80%3AAHCIBL%3E2. 0. CO%3B2-Q
Article Sources and Contributors 2

Article Sources and Contributors

Panic of 1825  Source: http://en.wikipedia.org/w/index.php?oldid=410334772  Contributors: Deb, Deucalionite, EoGuy, Epbr123, Good Olfactory, Hmains, Jaraalbe, JayHenry, Jmkleeberg,
Mion, Nbarth, NormBograham, VanishedUser314159, Xtzou, 2 anonymous edits

License
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