WASHINGTON — Recent government actions to stabilize the economy have made modest inroads, although most signs continue to paint a dour economic picture, according to a Federal Reserve Board report released Wednesday.

In the agency's "Beige Book" report on economic conditions at the 12 Fed districts, two offered some positive reviews on specific emergency measures regulators have taken to thaw the credit markets.

The Chicago Fed singled out the Federal Deposit Insurance Corp.'s plan to back bank debt, while the Dallas Fed said capital infusions by Treasury have been helping banks to lend again.

"The FDIC's debt guarantee program and Federal Reserve lending were said to have improved liquidity in the interbank market," said the Chicago Fed. The Chicago Fed also said higher deposit insurance limits had "slowed deposit outflows."

The Dallas Fed said that while the cost of capital is still elevated, the Treasury's Troubled Assets Relief Program, which has been used to inject capital into banks, has provided some reassurance to banks.

"Larger institutions reportedly feel less constrained after receiving Tarp money and somewhat more comfortable supplying loans," said the Dallas Fed.

With a recession officially declared this week, the mostly negative report was unsurprising.

Overall, economic activity continued to drop at each of the Fed's 12 bank districts since the last report six weeks ago, with most districts reporting a general contraction in lending, amid higher credit standards and a spike in delinquencies and defaults.

Most districts cited continuing declines in residential and commercial real estate values, a slowdown in business and consumer lending, and tighter competition for deposits.

A respondent cited by the Boston Fed called the credit squeeze "murderous."

Bankers in the New York district reported weakening demand in all loan categories, particularly for residential loans, where 68% of bankers reported lower rates. The New York Fed reported widespread increases in delinquencies across all loan categories.

Among the few bright points, the Philadelphia Fed reported banks saw loan volume rise in November, with some regionals picking up new business borrowers.

Although the Philadelphia Fed also said it saw strong competition for deposits with many banks raising rates on savings accounts and certificates of deposit, it also said stronger deposit growth would be needed to obtain sufficient funds to meet loan growth needs.

The Cleveland Fed said business loan volume was steady to higher, and core deposits are growing especially at banks paying competitive rates on CDs and money market accounts.

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