Financial Guaranty Insurance Co. has swung into high gear in an effort to "reinvent" itself, redeploying employees into task forces to examine possible new business ventures, market sources say.

Diversification has been an ongoing theme among all the major bond insurers in recent years. Expansion into areas like structured finance, international markets, guaranteed investment contracts, and money management have been explored by FGIC and its major competitors, AMBAC Indemnity Corp. and Municipal Bond Investors Assurance Corp. In addition, AMBAC recently unveiled a municipal swaps subsidiary, while FGIC offers short-term liquidity for variable-rate debt.

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