What was the name of the 1998 hedge fund whose near-collapse led to a major Federal Reserve-coordinated rescue?

Long-Term Capital Management was the hedge fund whose near-collapse led to a major Federal Reserve-coordinated rescue in 1998.

LTCM used highly leveraged trading strategies, including fixed-income arbitrage. Its partners included prominent academics and financial professionals, and the fund initially achieved exceptional returns. The Russian financial crisis and broader market turmoil in 1998 caused many positions to move against it.

Because LTCM had extensive dealings with major banks and was deeply leveraged, its disorderly failure was feared to threaten financial-market stability. The Federal Reserve Bank of New York helped coordinate a private-sector recapitalization by fourteen financial institutions. The central bank did not directly provide the rescue money.

The episode became a classic warning about leverage, interconnected counterparties, and models that underestimate extreme market events. It also influenced later debates about systemic risk and financial regulation.