GKO was the name of Russia's short-term government debt instrument that defaulted during the 1998 Russian financial crisis.
GKOs were Russian treasury bills, with the acronym derived from their Russian name, gosudarstvennye kratkosrochnye obyazatelstva. The government relied heavily on issuing them to finance budget deficits and refinance maturing debt.
By 1998, falling commodity prices, weak tax collection, political instability, and the continuing effects of the Asian financial crisis made the debt structure increasingly fragile. On August 17, 1998, Russia devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic debt, including GKOs.
The default helped trigger severe losses for Russian banks and investors and contributed to the collapse of the hedge fund Long-Term Capital Management in the United States. OFZs were another class of Russian government securities, but the short-term bills central to the 1998 default were GKOs.