Which U.S. investment firm collapsed in 1998 after the Russian debt crisis and required a Federal Reserve-organized rescue?

Long-Term Capital Management collapsed in 1998 after the Russian debt crisis and required a Federal Reserve-organized rescue.

LTCM was a highly leveraged hedge fund founded in 1994. Its partners included prominent finance academics and traders, and it used complex mathematical models to make large bets on small price differences between related securities.

Russia's August 1998 default and ruble devaluation produced extreme market movements. Positions that LTCM expected to converge moved further apart, while investors became less willing to trade or lend. The fund faced losses and a liquidity crisis that threatened to spread through financial markets.

The Federal Reserve Bank of New York helped organize a private-sector recapitalization in September 1998. The central bank did not directly bail out LTCM with taxpayer money; major financial institutions supplied the rescue capital.