Assured Guaranty Ltd. president and chief executive officer Dominic Frederico said yesterday that although the municipal market will face stress in the short term, there are better options for supporting it than states or the federal government funding a mutually owned insurer.

A healthy market would have three or four strong insurers, and private solutions are needed to help alleviate the lack of capacity currently available in the market, he said during an earnings conference call with analysts and investors. But a federally supported insurer would drive those potential solutions out and leave the municipal market dependent on the federal government in the future.

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