When Europe Invented Panic Banking — January 7, 1608
The day citizens discovered banks don’t keep all the money.
January 7, 1608 — Europe Discovers the First Bank Run, and Chaos Ensues
INTRO
Banks have always had one dirty little secret:
They don’t actually keep all your money.
Today we call it “fractional reserve banking.”
Back then?
People called it “WHAT DO YOU MEAN MY MONEY ISN’T HERE!?”
On January 7, 1608, Europe had one of its earliest recorded bank runs — and financial panic became a tradition humans have cherished ever since.
PART I — THE 1600s: A BEAUTIFUL ERA OF WIGS, TRADE… AND QUESTIONABLE ACCOUNTING
The early banking houses of Europe were:
✔ privately run
✔ lightly regulated
✔ confident
✔ and absolutely not prepared for anxious customers
Banks would lend out deposits, invest them, gamble them, and pray everything worked out.
Spoiler:
It did not.
Which brings us to our main event.
PART II — THE PANIC BEGINS
Rumors spread that a prominent bank was unable to pay out withdrawals.
In the 1600s, rumors were basically the CNN of the time — loud, unreliable, and terrifying.
Citizens rushed to get their deposits back.
Bankers panicked.
Money vanished.
Account books spontaneously developed “creative interpretations.”
It was the 17th-century version of FTX, but with more candles and less crypto.
PART III — WHY DID THIS BANK RUN MATTER?
This panic made one thing painfully clear:
People assumed banks stored money like a treasure chest.
Banks assumed people would never ask for all of it back.
Both sides were wrong.
As withdrawals skyrocketed, banks froze, investors fled, and local governments scrambled to calm the public — mostly by saying vague things like “We promise everything is fine.”
Classic.
PART IV — HOW PANIC SHAPED MODERN FINANCE
The 1608 collapse forced early bankers and governments to rethink:
transparency
reserves
lending
public confidence
and not lying to customers (optional, apparently)
The event didn’t stop future bank runs.
If anything, it inspired future generations to panic even faster.
CONCLUSION — A TRADITION AS OLD AS MONEY ITSELF
January 7 is a reminder that humans have always feared the same thing:
“Is my money actually safe?”
In 1608, the answer was “no.”
In 2025… it’s complicated.
🔥 CALL TO ACTION
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❓ FAQ
Q: What caused the 1608 bank run?
Rumors of insolvency and public distrust ignited panic withdrawals.
Q: Did governments intervene?
Some attempted calming measures, but regulation barely existed.
Q: Was this truly the first bank run?
It’s one of the earliest well-documented cases in Europe.