Which institution arranged the 1998 rescue of Long-Term Capital Management after the Russian crisis?

The Federal Reserve Bank of New York arranged the 1998 rescue of Long-Term Capital Management.

Long-Term Capital Management, or LTCM, was a highly leveraged hedge fund founded in 1994. Its partners included prominent traders and Nobel Prize-winning economists. After Russia defaulted on domestic debt in August 1998, markets became unusually volatile and investors fled risky positions.

The New York Fed convened major banks and brokerages on September 23, 1998. Those firms supplied roughly $3.5 billion in capital and took control of LTCM’s portfolio. The Federal Reserve did not provide the rescue money, but it helped coordinate the private-sector solution because officials feared disorderly liquidation could destabilize markets.

The episode became a landmark example of systemic-risk concerns linked to leverage. LTCM’s rescue is sometimes called a government bailout, but the direct recapitalization was supplied by private financial institutions. The Federal Reserve later cut interest rates as market stress eased.