What was the name of the 1998 hedge fund whose near-collapse threatened financial markets?

Long-Term Capital Management was the hedge fund whose near-collapse threatened financial markets in 1998.

Long-Term Capital Management, or LTCM, used highly leveraged trading strategies based partly on mathematical models. Its partners included prominent finance experts and Nobel Prize-winning economists, which helped create confidence in the firm’s sophistication. However, the Russian financial crisis in August 1998 and other market shocks caused its positions to move sharply against it.

The Federal Reserve Bank of New York organized a private-sector rescue in September 1998. Major banks supplied capital to stabilize the fund, while the government did not directly provide the bailout money. The episode worried officials because LTCM’s enormous leverage and relationships with many counterparties could have produced broader market disruption. Its failure is often cited as a warning that complex models and prestigious management cannot eliminate liquidity and systemic risk.