The Federal Reserve Board's periodic study of economic conditions painted another downbeat picture of the financial services sector Wednesday, as credit continued to dwindle and the housing market showed few signs of a rebound.

Delinquency rates are growing for a quarter of bankers in the Federal Reserve Bank of New York's district, according to the central bank's Beige Book. The Federal Reserve Bank of Atlanta said bankers in its districts are boosting rates to reflect risk and are requiring larger down payments and higher credit scores to approve loans.

The Federal Reserve Bank of Kansas City said commercial and industrial loan demand has fallen "appreciably" in its district, while interest in consumer installment and residential real estate loans has dropped only "modestly."

The Federal Reserve Bank of San Francisco reported lower loan quality, along with "scattered reports of more severe deterioration and concerns about bank failures, especially among community banks that have been stressed by poorly performing construction loans."

Optimism was mostly limited to the Federal Reserve Bank of Dallas, which reported "relatively satisfactory conditions."

In that district, "credit quality continues to hold up, although contacts still expect to see some deterioration in the near term," the report said.

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