A bid to make regional banks safer is making banks unhappy.

I'm David Brancaccio, federal regulators want big banks which aren't quite too big to fail

to take on more debt, $70 billion worth.

A more debt for you and me might not necessarily improve our financial health.

Banking is different. It's an effort to strengthen regional banks and lower the risk they go bust,

Silicon Valley, Signature, and First Republic Bank style.

But the banking industry is generally unhappy with this idea.

Marketplaces know of Asafo is here to explain.

Right, David, and these rules do seem like quite the paradox.

And regulators do think they in fact will fortify regional banks.

These proposed rules already apply to so-called too big to fail banks.

So follow me on this.

The key here is that this would be long-term debt that banks would need to take on.

A bank borrowers' money hangs on to it for a while.

And if it gets into trouble as in depositors suddenly start withdrawing funds,

well then the bank doesn't have to pay back its long-term debt.

It gets to keep the money.

This is known in the industry as a bail-in as opposed to a bail-out.

It's a matter of who ends up holding the bill.

And because creditors are taking on risk, they're theoretically more likely to keep tabs on a bank's finances

and in return they get interest to higher rate of return on their investment.

And the banking industry doesn't like this.

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