"The markets are not healed, but I believe a lot of progress has been made," Poole said in an interview with Bloomberg Television. "You see a lot of the spreads narrowing, for example, the term Libor is more or less back to normal."

"A lot of banks and others are raising capital. We see the monoline insurance industry raising capital, getting things straightened out there. It's coming along."

As reported by Reuters.

Obviously, there are some challenges in the economy right now and of course we're looking at that very, very carefully. I think it's very valuable that some of the concerns about the monoline insurers are being addressed by market participants.

From Q&A as reported by Reuters

U.S. banks' direct exposures to losses from downgrades of guarantors' ratings appear to be moderate relative to the banks' capital...

Of greater concern is the potential for losses at banks that have hedged their holdings of super senior tranches of CDOs of ABS with credit protection purchased from the guarantors.  These hedges lose value when the financial condition of the guarantors deteriorates.  In fact, many banks already have written down the value of their hedges significantly to reflect the market view that some guarantors may not meet their obligations on the protection they sold to the banks. 

I'll just speak for myself. It wasn't - the bond insurers were not an important factor for me. The week before we just got a slew of adverse real news, and that was the predominant consideration in my mind for that intermeeting move.
 
In response to a question about the role that bond insurer problems played in the FOMC’s decision to ease on January 22.  Unofficial transcript.

Banks have exposure the financial guarantors through banks' holdings of insured municipal securit1es and structured securities, through derivative transactions for which the guarantors are a counterparty, and through loans and lines of credit they have extended to the guarantors. Banks also have significant exposures to the financial guarantors through the liquidity support that banks provide for certain types of municipal securities and structures, including variable-rate demand obligations (VRDOs) and tender-option bonds (TOBs), as wen as some asset-backed commercial paper conduits. Reduced confidence in the financial guarantors could lead some investors to exercise options to put these securities back to the liquidity providers. Moreover, money market funds, who are major investors in these securities, can be required to put the securities back to the liquidity providers if the financial guarantor is downgraded significantly. Thus, banks could be required to bring a sizable volume of assets, especially municipal securities, onto their books.