US bank regulators just tightened the rules on what counts as a dangerous banking practice, a warning sign for anyone worried about the health of the banking system.

• The FDIC and OCC finalized a rule in late August that finally defines "unsafe or unsound" banking, a term used for decades without a clear meaning.
• Regulators will now focus on real money risks and stop chasing paperwork, reputation, and procedure issues.
• The trigger is whether a bank could hurt itself badly or force a payout from the deposit insurance fund, which protects savers' money.
• That fund is thin — the Silicon Valley Bank collapse already exposed how little cushion it has, and Congress would likely have to step in for a bigger wave.
• Regulators also cut the time it takes to shut a failed bank and hand its assets to a buyer to under a day.

Outlook: A stock market drop this fall and winter could expose banks sitting on old bond losses and shrinking loan income, setting up more failures in 2027.