Buffett Opens Bond Insurer

Berkshire Hathaway (BRK.A Quote) is establishing a bond insurance firm with the goal of giving local governments a cheaper borrowing option, a move that will likely mean stiff competition for existing players such as Ambac (ABK Quote) and MBIA (MBI Quote), a report said.

The Wall Street Journal said Friday that Berkshire Hathaway Assurance Corp. will begin operating today in New York. The business will guarantee bonds that cities, counties and states use to finance various infrastructure projects, the report said.

Berkshire, run by Nebraska billionaire Warren Buffett, is making the move at a time when big bond insurers are at risk of seeing their credit ratings downgraded amid the turmoil in the financial markets. ...