What was the 1997–1998 worldwide market panic called after Russia defaulted and devalued the ruble?

The worldwide market panic associated with Russia’s 1998 default and ruble devaluation is called the Russian financial crisis.

On August 17, 1998, Russia devalued the ruble, declared a moratorium on some foreign debt payments, and restructured domestic government debt. The announcement followed years of fiscal pressure, weak tax collection, falling commodity revenues, and the after-effects of the Asian financial crisis.

The crisis quickly spread through international markets. Investors reassessed risk in emerging economies, and heavily leveraged institutions suffered losses. Long-Term Capital Management, a major United States hedge fund, faced collapse partly because of positions affected by the turmoil; it was stabilized through a private-sector rescue organized by the Federal Reserve Bank of New York.

The Russian episode is often grouped with the Asian financial crisis because the events overlapped, but they were not the same crisis. The Asian crisis began in 1997 with pressure on Thailand’s baht and spread across several Asian economies. Russia’s default created a fresh shock that reached markets well beyond Europe and Asia.