Financial ServicesThe financial services segment comprises the investment agreement business and the derivative products business. Gross interest income less gross interest expense and operating expenses from investment and payment agreements, plus operating results from the derivative products business was ($69.6) million for the second quarter of 2010, down from ($37.1) million for the second quarter of 2009. The decrease was primarily driven by the impact of declining interest rates on the financial services derivative portfolio during the second quarter of 2010, partially offset by lower termination losses on canceled swaps and valuation adjustments relating to Ambac’s credit risk. Beginning in the second half of 2009, the financial services segment has been positioned to record gains in a rising interest rate environment in order to provide a hedge against certain exposures within the financial guarantee segment. The interest rate swap and investment agreement businesses are in run-off.
Ambac Financial Group, Inc. Announces Second Quarter 2010 Results
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