The 1772 Credit Crisis That Foreshadowed Modern Banking

In this episode, Lucas and Luna dive into the 1772 credit crisis—a financial panic that began in London and spread across Europe, forcing the closure of the Ayr Bank in Scotland and shaking the British Empire. They explore how Alexander Fordyce's speculative bets and a web of interconnected bills of exchange created a systemic collapse eerily similar to modern banking runs. Lucas breaks down the mechanics of 18th-century shadow banking, the role of the Bank of England as a reluctant lender of last resort, and how this crisis influenced Adam Smith's thinking on banking regulation. Luna questions whether the lessons—about leverage, counterparty risk, and moral hazard—were actually learned. The episode ties the 1772 panic to the 2008 financial crisis, showing how much (and how little) has changed in 250 years. Specific numbers: the Ayr Bank's £3 million in liabilities, the Bank of England's £1.5 million liquidity injection. This is economic history that feels startlingly contemporary. #1772CreditCrisis #AlexanderFordyce #AyrBank #AdamSmith #BankOfEngland #FinancialPanic #ShadowBanking #BillsOfExchange #LenderOfLastResort #MoralHazard #SystemicRisk #EconomicHistory #BankingPanic #18thCenturyFinance #Economics #HistoryLessons #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo