Payam Javan: Silicon Valley Bank, a financial institution that served venture capitalists and IT entrepreneurs in Northern California, has closed after 40 years in business.

The closure has caused panic among investors, prompting a bank run and leading to the failure of Signature Bank in New York City.

Federal regulators have taken control of SVB, which lacked the liquid capital to fund the cash retreat.

The Federal Reserve has promised to compensate investors in both institutions, but the incident raises questions about the strength of the financial sector and the role of individual investor confidence.