Since the last report, the debt burden has increased in both the household and enterprise sectors, although at a more moderate pace than previously for enterprises. Nevertheless, the risk of substantial loan losses in banks is not considered to be higher in the short term due to sharp growth in household real disposable income, a high equity ratio in the enterprise sector and an improved economic outlook both internationally and in Norway. In the slightly longer term, persistently strong credit growth may lead to financial imbalances and increased credit risk. Mainland enterprises currently have a total debt burden on a par with the high levels seen at the end of the 1980s. Growth in enterprise debt is still stronger than growth in value added. Banks' total lending to the exposed sector is considerably lower than to the sheltered sector. The high burden of debt in the sheltered sector means that these enterprises are dependent on solid earnings in the years ahead in order to service loans. For the enterprise sector as a whole, the equity situation improved throughout the 1990s. The credit risk associated with loans to the enterprise sector is considered moderate. There is less risk associated with lending to the household sector. Although the household debt burden continues to rise sharply, it is on the whole lower than at the end of the 1980s. However, there are considerable differences between various household categories. Low and middle income households have increased their debt burden and thus reduced their ability to withstand periods of interest rate increases or unemployment. On the whole, credit risk in connection with loans to the household sector is considered to be fairly low, which is underpinned by the high and rising share of mortgage-backed loans. Most large banks reduced lending growth in 2001. At the same time, overall capital adequacy improved. Equity is high now compared with losses, especially compared with the situation at the beginning of the 1990s. Estimates show that losses may increase considerably without causing any immediate risk to banks' financial strength. On the whole, the outlook for financial stability is considered satisfactory.