The sharp 1994 Mexican financial crisis that spread through emerging markets is commonly called the Tequila Crisis.
The crisis began after Mexico devalued the peso in December 1994. Investors became concerned about Mexico's foreign-currency obligations and the country's ability to maintain its exchange-rate policy. Capital rapidly left Mexican markets, pushing the peso down and creating a severe financial emergency.
The episode affected more than Mexico. Investors reassessed risks in other emerging economies, and the resulting market contagion became known as the “Tequila effect.” The United States, the International Monetary Fund, and other institutions assembled a large support package to help Mexico meet its obligations and stabilize the peso.
The crisis is also called the Mexican peso crisis, but “Tequila Crisis” is the distinctive nickname used in financial history. It is separate from the 1997 Asian financial crisis, although both demonstrated how quickly investor fear could cross national borders.