Silicon Valley Firms Expect Changes in Financial Methods After SVB Disaster

The abrupt collapse of the Silicon Valley Bank, the second-biggest bank failure in U.S. history, prompted regulators to impose emergency measures to stem the fallout. WSJ’s Rachel Ensign explains how the crisis unfolded and what could happen next. Photo: Jeff Chiu/Associated Press

By Berber Jin

, Katherine Bindley

and Rolfe Winkler

March 13, 2023 7:46 am ET

Startup founders and investors breathed a collective sigh of relief after the federal government agreed to backstop deposits at Silicon Valley Bank, but they said the lender’s collapse would drive changes in the industry’s financial practices.

The decision, announced Sunday afternoon California time, ended a frenzied multiday race to shore up cash and meet payroll needs. The government move surprised many in the industry, which was bracing for a delay of weeks and even months before depositors would get full access to their cash.