The Tequila Crisis was the 1994 Mexican financial crisis that caused a major stock-market collapse after a peso devaluation. Mexico devalued the peso in December 1994, triggering a rapid loss of investor confidence.
The crisis involved a sharp fall in the peso, capital flight, rising interest rates, and severe pressure on banks and businesses. Mexico's short-term dollar-linked debt made the adjustment especially dangerous when confidence weakened.
The turmoil spread beyond Mexico and became an early example of modern international financial contagion. The United States and other countries supported an assistance package that helped Mexico meet its obligations and stabilize its financial system.
“Tequila Crisis” is the established international nickname, while “December Mistake” refers specifically to the government's decision to widen the peso's exchange-rate band shortly before the full devaluation. Those labels describe related but different aspects of the episode.