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The Working Paper Series seeks to disseminate original research in economics and fi nance. All papers have been anonymously refereed. By publishing these papers, the Banco de España aims to contribute to economic analysis and, in particular, to knowledge of the Spanish economy and its international environment. The opinions and analyses in the Working Paper Series are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem. The Banco de España disseminates its main reports and most of its publications via the INTERNET at the following website: http://www.bde.es. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged.

Rationale. To analyse, owing to their macroeconomic implications, the conditions and volume of funding raised by households and firms and to quantify the credit risk taken on by deposit institutions via loans to these two sectors. Takeaways. • Financing conditions continued to tighten in the second half of 2022 and the transmission of market rate rises to the cost of lending accelerated. This has led to a decrease in the flow of new funding. • The bank loan stock to the resident private sector in 2022 Q3 saw a slight decrease compared with the same quarter in recent years, mainly owing to trends in the stock of loans to business activities. Non-performing and Stage 2 loans continued to decline, except in some portfolios, such as those with ICO-backed loans. • Exposures to the energy sector have a limited weight in the bank credit business in Spain, although their quality has worsened throughout 2022 and somewhat tighter credit standards have been observed.

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