Net lending activity by banks continues to fall, though some areas are showing modest signs of improvement in loan demand and liquidity, the Federal Reserve Board said Wednesday.

The central bank's Beige Book, a report on economic activity in its 12 districts, said the industry's turmoil means credit is still tight.

Consumer loan demand have generally been on the decline since the last report six weeks earlier, the Fed said, and mortgage demand "remained depressed."

Some districts reported silver linings. Bankers in Cleveland district said loan demand was "stable to up," and bankers in the New York, Cleveland and Richmond districts said refinancing activity was still at high levels.

In the Boston and Cleveland districts, respondents noted more favorable loan demand for regional institutions than national ones.

Still, lenders said they are continuing to use strict standards for providing credit; there were even scattered reports of further tightening for construction and commercial real estate loans.

In most districts, credit quality was lower in all categories. Exceptions included the Kansas City district, "where current loan quality was unchanged."

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