The probability and severity of the risk of any "worst case" scenario afflicting Australian banking has increased, Sharad Jain, director, financial institutions ratings at S&P Global Ratings, said yesterday.The credit rating agency's emphasis on darker horizons for the sector and the maintenance of the credit ratings of the Big Four banks at AA- were two prominent themes in a webcast conducted by S&P yesterday.On Monday, the credit ratings agency downgraded by one notch the ratings of 23 financial institutions, including regional banks and mutuals."Our base case remains benign. We consider the arrears rate and the loss rate [in banking] remain low," Jain said.The downgrade applied this week was informed, he said, by "the worst case: it's the risk of that scenario occurring and its severity that'd increased."Nico DeLange, also a director, financial institutions ratings, provided a rough estimate of the level of capital each major bank may need to raise in the future, in the context of the still undefined "further strengthening required" in capital, as APRA chief Wayne Byres put it last month.DeLange said that to lift their RAC, or risk adjusted capital ratios by 100 basis points, each major bank would need to generate, on average, A$6 billion in capital.