Against the backdrop of downgrades among the financial guarantors, a group of eight banks has formed a group to bail out one of the bond insurers, and people familiar with the matter say a second and perhaps third group of banks is looking at solutions for other monolines.

It’s been reported that the consortium — made up of Citigroup Inc., UBS, Wachovia Corp., Barclays PLC, Royal Bank of Scotland Group PLC, Societe Generale, BNP Paribas, and Dresdner Bank AG — was looking to bail out Ambac Financial Group Inc., parent of ailing bond insurer Ambac Assurance Corp.

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