I never quite understand this logic under the current...

I never quite understand this logic under the current conditions. If IR rise, delinquency of loans will naturally rise too. In the recent past, APRA/RBA used the macro prudential controls to control very leveraged risky loans. Going back to 2014-15, when they used these tools to try to dampen animal spirits in property speculations, 10-15% drop in valuation. I still recalled buying the WBC breakout and only patiently waited for my 'no loss' wrong bet 2 years later and none of the CBA peers ever had another opportunity to test those peaks!