What was the first clearly recorded financial crisis in history?

Hello, when this topic comes up, many people's first reaction might be "Tulip Mania," which is indeed the most famous historical case and often cited as the "first" financial crisis.

Tulip Mania - 1637, Netherlands

This event took place in 17th-century Netherlands, during what was known as the Dutch "Golden Age," a time of great wealth and a relatively open social atmosphere.

How it Started? Tulips were originally introduced to Europe from the Ottoman Empire. Because of their rarity and beauty, they quickly became a luxury item for the wealthy to flaunt their status. Especially those rare varieties with unique patterns (actually caused by a virus infection), such as "Semper Augustus," saw their prices skyrocket.
The Frenzy Phase Gradually, things took a turn. People started buying tulip bulbs not to plant them, but to resell them for a quick profit. This was just like speculating in stocks or real estate, with everyone believing prices would be even higher tomorrow. At its peak, the price of a single rare bulb could buy a mansion in the center of Amsterdam!

Even more insane, they invented a system similar to "futures." While the bulbs were still in the ground during winter, people began trading contracts for "delivery next spring." Many invested their entire life savings, or even borrowed money, to "speculate" on tulips.
The Bubble Bursts In February 1637, suddenly, at an auction, no one was willing to bid. Panic spread like a plague; everyone wanted to quickly dump their bulbs or contracts, but there were no buyers left. Prices plummeted, falling by over 90%. A bulb that was worth a fortune yesterday might be worth less than an onion today.
The Outcome Countless people lost everything, especially those who had used leverage (borrowed money to invest), going from rich to destitute overnight. The entire social credit system suffered a massive shock.

But, Was This Really the "First"?

While Tulip Mania is very famous, some historians argue that it was more of a commodity speculation bubble than a "financial" crisis in the strict sense.

If we are looking for a case that better fits the modern definition, involving stocks, publicly traded companies, national debt, and public participation, then we might need to look at two events that occurred almost simultaneously:

The South Sea Bubble & The Mississippi Bubble - 1720

The South Sea Bubble (Britain): The South Sea Company acquired a portion of the British government's national debt and issued shares to the public. The company painted a beautiful picture of trade with South America (though most of it never materialized), and its stock price soared. From royalty and nobility to commoners, all levels of society were swept up in this stock-trading frenzy. When the bubble finally burst, even great scientists like Isaac Newton lost a significant amount of money, leaving him with the famous quote: "I can calculate the motion of heavenly bodies, but not the madness of people."
The Mississippi Bubble (France): Similar to the South Sea Company, a Scottish banker named John Law established the Mississippi Company in France, also issuing shares to manage France's massive national debt. Again, grand promises were made about striking it rich in the Louisiana colony in North America (then called Mississippi), leading to a surge in stock prices, and ultimately, a complete collapse.

These two events, because they involved stock companies, complex financial instruments (stocks), national credit, and large-scale public speculation, are considered by many economic historians to be the true beginning of modern financial crises.

In Summary

The Most Famous "First": The Tulip Mania in the Netherlands in 1637. It's simple, dramatic, and a perfect textbook case of a speculative bubble.
The More Rigorous "First": The South Sea Bubble in Britain and the Mississippi Bubble in France in 1720. These contained more core elements of a modern financial crisis, such as the stock market and the interconnectedness of national financial systems.

So, when asked, you can start with the story of the tulips because it's the most classic; if you want to appear more professional, you can then add the two "bubble brothers" from 1720.