Commonwealth Bank will lift interest rates on owner occupier and investment loans by 15 basis points from November 20, more or less following the lead set last week by Westpac.The rate rise may lift the bank's earnings by around A$390 million, or by about four per cent, Macquarie Equities projected last week in the course of analysis on Westpac's rate rise.In a media release, CBA, like Westpac, tied the rate rise to its increased level of capital and "the cost of the new capital required to make the Australian banking system more secure."It will be interesting to see how the escalation in lending rates by the sector's two largest suppliers of credit induces more followers, such as the remaining two major banks.If so, the increased cost of credit must restrain demand and may in turn sharpen tension over lending standards.On lending standards, Wayne Byres, head of the Australian Prudential Regulatory Authority, weighed in at a hearing of the Senate's Standing Committee on Economics.Byres said standards fell to "horrible levels" in some areas.Byres said an APRA target limit of growth in investment loans of ten per cent a year had "only recently come into effect, so we are watching carefully to see how they play through the system."He said that "based on the latest available data, the rate of growth in credit for housing is, in aggregate, still accelerating. However, within this there is a compositional switch underway, as a moderation in the growth in lending to investors has been offset by somewhat stronger growth and more competition in lending to owner occupiers. "In such an environment, APRA remains very alert to any sign of deteriorating credit standards, and is monitoring those ADIs identified as needing to strengthen their lending policies."