Separated by a continent, should Alabamians be scared about the collapse of two banks in California and New York?

While the temptation for some is to flash back to the financial crisis of more than a decade ago, industry figures say action taken by the federal government and the financial markets should be enough to reassure the public.

On Friday, Silicon Valley Bank, a favorite institution of West Coast tech startups, was closed by California regulators, with the Federal Deposit Insurance Corp. taking charge of its assets.

Two days later, Signature Bank in New York closed its doors, just as the Biden Administration announced that customers at both banks would have access to their deposits, even beyond the $250,000 FDIC threshold.

Birmingham’s Regions Bank, Alabama’s only Fortune 500 company, said in a statement that it has a completely different business model than Silicon Valley Bank and Signature.

“We have a diversified business serving a wide range of consumers and established businesses of all sizes in different industries across our 15-state retail-banking footprint and beyond,” the company said.

“Unlike the banks that failed, the majority of Regions’ deposits are fully insured by the FDIC. Separately, we consistently participate in Federal Reserve capital stress testing. We also participate in the Federal Reserve’s Horizontal Liquidity Review that is conducted periodically.

“Regions has constructed a balance sheet that is resilient, sustainable and will perform consistently over time. Regions is sound and stable, and we stand ready to support our customers in a wide array of economic conditions and cycles,” the bank stated.

Alabama Bankers Association CEO and President Scott Latham echoed those comments to WSFA, saying that banks with diversified clients are more stable. “The message that we have for Alabamians today and every day is that banks are a safe place to keep your money,” he said.

Regions Chief Investment Officer Alan McKnight said what happened last weekend was a “good old-fashioned bank run,” aided in part by social media. He likened it to the scene in “Mary Poppins” where the Banks children can’t get their money, and the resulting ruckus causes other customers to suddenly seek their funds.

“That’s happened at a scale that we haven’t seen in a long time,” McKnight said.

“You’re pulling $42 billion out of a bank in less than 24 hours, and it’s been supercharged by fear and social media. The positive for investors and people is that we think the Federal Reserve, the FDIC and the Treasury have done the right thing, stepping in and creating dual backstops.”

The Federal Reserve will ease the terms of banks’ access to its discount window, while the Fed and Treasury are preparing a program to use the Fed’s emergency lending authority to create another buffer.

However, these actions aren’t what some are calling a bailout, McKnight said.

“The shareholders of those two organizations have lost their money,” he said.

“To some extent, it looks as though there are creditors and bond holders who will face some of the same circumstances. The average person can know they have access capital to ensure they can receive their deposits.”

What may spook investors or the man on the street is the looming talk of a recession for more than a year in the wake of massive inflation.

While the Federal Reserve continues to mull rate increases to stem rising prices, McKnight said people should not expect a slowdown on par with the Great Recession of 2008.

“There should be more volatility (going forward),” he said.

“For most people, it’s about focusing on what they can control. When you make decisions of action just for action’s sake, you make poor decisions. Consumer savings rates are still very good, the job market is still very good. We’re already seeing a slowdown, and concerns about credit and risk, and that’s going to slow things down. But this is not 2008. We expect it to keep slowing, but we can manage through that.”