New York - A domino effect is predicted on other U.S. regional banks after the collapse of Silicon Valley Bank (SVB) by financial industry executives and investors in case regulators do not find a buyer over the weekend to protect uninsured deposits.

SVB Financial Group, a startup-focused lender, became the largest bank to fail since the 2008 financial crisis on Friday, leaving billions of dollars belonging to companies and investors stranded.

The Federal Deposit Insurance Corporation (FDIC), which was appointed receiver, are trying to find another bank over the weekend that was willing to merge with Silicon Valley Bank.

Some industry executives said such a deal if materialised would be sizeable for any bank. It would also require regulators to give special guarantees and make other allowances for any buyer.

The Santa Clara bank, a California-based lender and 16th largest U.S. bank with $209 billion in assets, made it to the list of potential buyers who could pull off a deal over a weekend.

Regulators discussed the creation of a fund that would allow regulators to backstop more deposits at banks that run into trouble, reported Bloomberg.

Such a measure they hope would reassure depositors and help contain any panic. However, it was not clear if regulators would have political support to throw a lifeline to the bank, which catered to Silicon Valley startups and investors.

Some analysts and prominent investors warned that without a resolution by Monday, other banks could come under pressure if people worried about their deposits.

Silicon Valley Bank had an unusually high level of deposits that were not covered by the FDIC's guarantees, which are capped at $250,000.

Billionaire hedge fund manager Bill Ackman said that failure to protect all depositors could lead to the withdrawal of uninsured deposits from other institutions as well. Kyle Bass, founder and chief investment officer of Hayman Capital Management, told Reuters that the Fed needed to "arrange a marriage" for SVB by Sunday evening, before markets opened in Asia.

Regional and smaller bank shares were hit hard on Friday.

The S&P 500 regional banks index dropped 4.3%, bringing its loss for the week to 18%, its worst week since 2009.

Some banks could look to pre-emptively raise capital to fortify their balance sheets or try to strike deals of their own, industry executives said.