The big four banks have had their credit rating slashed by Standard & Poor's, the world's largest ratings agency, thus reducing the chance of an interest rate cut being passed on in full next week.
After the bankruptcy of the Lehman Brothers, Standard & Poor's began revising the ratings methodology and each country is assigned a grade that serves as a starting point for its banks.
The Deutsche Bank conducted a research report in July which revealed that Commonwealth Bank, ANZ Bank, Westpac & NAB would need to sell about $144 billion of bonds in the 12 months ending in June 2012.
Moody's ratings agency warned that Australia's banking system would face "crucial challenges" over the coming year due to global investors snubbing the banks as funding costs rise and the world economy slows.
Moody's have also warned that the health of the system depended on how severe and how protracted any contagion from the European crisis would be.