Initiation of Credit Contraction
- When
- 1818
- Where
- Second Bank of the United States headquarters (institutional context); curtailment initiated by western branches
The Second Bank initiated a sharp curtailment in loans by its western branches beginning in 1818, seeking to compensate for its laxness in regulating state bank credit markets.
The bank, deeply enmeshed in inflationary practices, sought to compensate for its laxness in regulating the state bank credit market by initiating a sharp curtailment in loans by its western branches, beginning in 1818. This marked a reversal from previous expansion. The contraction has been variously described as having "triggered", "pricked", or "precipitated" the ensuing financial panic, which began in the summer of 1818.
Sources
- Panic of 1819 Wikipedia, revision of 2026-07-01
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