Amid continuing market jitters over the solvency of bond insurers, there was word today that banks may be coming to the aid of one threatened carrier.

A source with knowledge of the situation said work is underway for a bailout of New York-based Ambac Financial Group by eight financial institutions. On Jan. 18, Fitch Ratings reduced the insurer from “AAA” to an “AA” rating.

CNBC reported that Barclays, BNP Paribas, Citigroup, Dresdner, RBS, Societe Generale, UBS and Wachovia and are the banks involved in negotiations that include New York State Insurance Commissioner Eric Dinallo.

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