Loss rates for Australia's biggest banks would be less than two per cent under a severe stress scenario, Fitch Ratings has concluded.Existing credit ratings "would be more resilient to moderate stress scenarios", Fitch said, but "the more severe scenarios in our analysis would be likely to result in ratings downgrades due to the second-order impacts.Fitch has a AA- rating on each of ANZ, CBA, NAB and Westpac.The ratings agency drew on Ireland's experience of the great recession - defaults of 13 per cent and house price declines of 43 per cent - to model stress on Australian banks.CBA "would experience the largest losses under our analysis," Fitch said, "followed by Westpac, reflecting these banks' larger exposures to Australian mortgages than ANZ and NAB. "However, we would expect ANZ and NAB to be more affected than the former two in a significant stress event due to their proportionally larger commercial exposures, which Fitch would expect to incur bigger losses in an economic downturn."Fitch said it "would expect a sharp rise in unemployment to be the most likely source of stress, although an interest-rate shock could place pressure on overstretched households [and] could also result in deterioration in the quality of mortgage loan books".