euro area and, thus, to reducing potential episodes of fragmentation. the values within this range are obtained based on different assumptions regarding the percentage of debt that matures in the short term and is refinanced. the 6. 8 pp impact at the upper end of the range assumes the full renewal of the debts maturing in the short term. a firm is considered to be under high financial pressure when the ratio of ( gross operating profit + financial revenue ) to financial costs is below one. the net interest burden is considered to be high when the ratio of ( debt service expenses - interest income from deposits ) to household income is over 40 %. also, it would help to align financial responsibility with the banking supervision and resolution decision - making mechanisms, which are already centralised. recent events must also be analysed in depth from a global regulatory and supervisory perspective. the federal reserve system has already published its review of the reasons behind events in the united states. we have also begun our own assessment through the financial stability committee and the basel committee on banking supervision, from which lessons will also be drawn. we should take an open - minded approach to the findings of these exercises, which usually allow us to fine - tune the regulations so that they can be continuously adapted in response to changing circumstances. we must also not forget that the final link of the regulatory reform ( basel iii ) is yet to be transposed into law in several jurisdictions. this regulation must be transposed completely and consistently so as to remedy the outstanding shortcomings, in particular in the definition of banks ’ risk - weighted assets. lastly, it must be borne in mind that the short and medium - term challenges posed by the recent period of extraordinary crises do not make tackling the banking sector ’ s structural challenges – such as those linked to the management of climate - related risks, digitalisation and growing competition from technology firms – any less urgent. thank you.

7. 7 % and those stemming from business abroad ( expressed in euro ) increased by 9. 6 % to 53. 7 % ( up 4. 3 pp on a year earlier ). - much of the decline in financial instruments in spain owed to the reduction in balances held with central banks ( - 31. 9 % ) and, to a lesser extent, to the drop in loans to the resident private sector ( - 2. 5 % ). meanwhile, the increase in financial instruments abroad was due to the growth in lending to the resident private sector in third countries ( 10. 3 % ) and in debt securities ( 16 % ), against the background of a depreciating euro. - debt securities grew by 11. 7 % and represented 13. 6 % of total assets at december 2022. 3 at consolidated level, more than 80 % of debt securities have a general government counterparty. - as for the reduction in the stock of lending to the resident private sector in spain ( down by 0. 7 % in 2022 ), the results of the bank lending survey ( bls ) indicate that both supply and demand - side factors contributed to these developments. the decline came despite the larger volume of new loans ( + 8. 9 % ) and the increased drawdown on existing credit lines ( + 12. 9 % ). - the stock of loans to households was down by 0. 2 %, essentially due to lending for house purchase, while other lending to households held stable. in particular, the flow of new mortgages slowed considerably in the second half of 2022, falling 5. 4 % year - on - year in q4, in line with the moderation in house purchases and prices. - the stock of lending to non - financial corporations and sole proprietors fell by 1. 5 %, with a more marked drop in the sectors hardest hit by the pandemic ( 6. 9 % ). this despite new loans growing 15. 2 %, while the principal drawn on available credit lines rose by 23. 3 %. - the average interest rate on loan portfolios increased during 2022, particularly in the last quarter of the year. however, the pass - through of the changes in reference rates ( around 30 % - 40 % ) was lower than that implied by the historical sensitivity to the cycle. credit quality - in 2022 the non - performing loan ( npl ) ratio4 fell by 0. 8 pp to 3. 5 % at december