Coronavirus is contagious. The spread of the novel coronavirus could cause a run on the financial system leading to a deep recession. Severe stock-market drops and increased demand for liquidity are warning signals. Bank equity capital has increased by $750 billion to $2.1 trillion since 2007, but a panic could still overwhelm well-capitalized banks. We need to restore the weapons to fight contagion that Congress took away during the last financial crisis.

Source: Wall Street Journal March 11, 2020 23:09 UTC