Financial Crisis Timeline

1792

The Panic of 1792 was a financial credit crisis that occurred during March and April of 1792. William Duer and Alexander Macomb speculated against stock held by the Bank of New York. The first Bank of the United States engaged in a large credit expansion and so increased the wave of speculation. But at the time of the Panic in 1792 the Bank of the United States was not functional and so Hamilton had to rely on the Bank of New York. During the panic, securities lost 25% of their value in two weeks.

However, soon after Treasury Secretary Alexander Hamilton intervened, the financial situation returned to normal. But because Hamilton bailed out the banking system he had set a precedent. Later crises caused the financial system to become steadily more dependent on the state support.

1825

At this time Britain was booming with exports particularly. Industrial production grew by 34% between 1820 and 1825. As a result British people wanted to invest their funds somewhere else. After London had displaced Amsterdam as Europe’s main financial hub. The new investing places to invest where those in the new world. Main problem with this was the distance, and people took advantage of it such as MacGregor and the country “poyasis” that didn’t exist. By 1823 bond prices started to plummet and at the end of 1825 Peru’s bond’s had fallen to 40% of their face value, with others following them down. More than 10% of the banks in England and Wales failed. For solution they looked north into Scotland were its banks were joint stock lenders. England was already the global hub for bonds. With ownership restrictions lifted banks started gobbling up rivals.

1857

At this time exports from Britain to the rest of the world were booming and resources increased when gold was discover in Austria. But there were two big changes occurring. The first big one was that a web of new economic links had formed. By then America was running $25m deficit with Britain. Railway companies were...