Which event in 1998 caused a severe global market shock after Russia defaulted on domestic debt?

The 1998 Russian financial crisis caused a severe global market shock after Russia defaulted on domestic debt.

Russia devalued the ruble and declared a moratorium on some foreign debt payments on August 17, 1998. The government also restructured domestic ruble-denominated debt, creating heavy losses for banks and investors.

The crisis followed falling commodity prices, weak tax collection, political instability, and the financial aftershocks of the 1997 Asian crisis. The ruble lost much of its value, while Russian banks and businesses faced widespread distress.

International markets were especially shaken when Long-Term Capital Management, a large U.S. hedge fund, suffered enormous losses on complex positions. A private-sector rescue arranged by the U.S. Federal Reserve helped avoid an uncontrolled liquidation, though the Russian crisis itself had broader political and economic consequences.