SEC Chairman: Vibrant Markets Help Virus Response

Securities and Exchange Commission Chairman Jay Clayton.

Photo: mandel ngan/Agence France-Presse/Getty Images

Some readers have become more frightened of potential government responses to the coronavirus than of the virus itself, and no wonder. Much of the panicked media and political class has been promoting infection countermeasures—even with uncertain benefits—regardless of the cost.

Therefore it may be some comfort to hear from a federal official who seems to understand that we are not facing a choice between human health and financial health. We need the latter to preserve the former. U.S. Securities and Exchange Commission Chairman Jay Clayton will be posting a comment soon on the SEC website. It reads in part:

The Securities and Exchange Commission and various other financial regulators are focused on two overriding and interrelated issues. First, we are facing an unprecedented national challenge—a health and safety crisis that requires all Americans, for the sake of all Americans, to significantly change their daily behavior and, for many, to make difficult personal sacrifices. Second, the recognition that the continuing orderly operation of our markets is an essential component of our national response to, and recovery from, COVID-19.

This should be obvious but we are not living in normal times. There are clear links between a robust economy, vibrant financial markets and the ability to provide outstanding medical care. Mr. Clayton continues:

The interrelationship between these issues cannot be overstated. Our health care, pharmaceutical, manufacturing, transportation, telecommunications, utility and many other private-sector industries are critical to our collective response to COVID-19. Like all companies, large and small, the thousands of firms and entrepreneurs in these industries—and the millions of employees and contractors that we are counting on to work around the clock—depend on the continuing access to payments and credit. More specifically, each hospital system, personal protective equipment manufacturer, trucking company, grocery chain, gas station and cleaning service must make and receive countless payments. In the vast majority of cases, these payments—and the confidence that they will be received—depend on the provision of credit from our banks and our capital markets and flows of capital more generally.

Mr. Clayton adds that after a “time-limited approach” to contain the virus, we must also plan to allow the economy to rebound:

Just as we have selectively ratcheted down our economic activity, we must, consistent with a continuing commitment to health and safety, prepare to thoughtfully ratchet up economic activity.

Here’s hoping the upward ratcheting can begin very soon.

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Mr. Freeman is the co-author of “Borrowed Time,” now available from HarperBusiness.

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