Which Russian financial crisis of 1998 helped trigger the collapse of Long-Term Capital Management?

The Russian financial crisis that helped trigger the collapse of Long-Term Capital Management was the 1998 Russian financial crisis.

Russia devalued the ruble and declared a moratorium on some domestic debt payments in August 1998. Investors had expected the government to defend its exchange-rate regime and honor debt obligations, so the announcement caused a major loss of confidence.

Long-Term Capital Management, a highly leveraged hedge fund, held positions that depended on relatively stable relationships among global asset prices. The Russian shock widened those relationships and made it difficult for the fund to unwind trades without causing further market disruption.

The Federal Reserve Bank of New York organized a private-sector rescue in September 1998, but it did not use taxpayer money to bail out the fund. The Russian crisis was part of a broader sequence of emerging-market turmoil that followed the 1997 Asian financial crisis.