MBIA chief mulls business split

Joseph Brown, new chief executive of MBIA Inc., is thinking of splitting the bond insurer’s guarantee business to maintain the firm’s AAA credit ratings, according to Bloomberg. Mr. Brown, who was yesterday appointed to the helm of MBIA, told Bloomberg that the insurer would either divide its guarantee business into two entities or raise capital. The decision follows pressure from regulators — namely New York insurance superintendent Eric Dinallo —to keep the insurers afloat with capital and discourage them from covering risky mortgage-related securities. “We’re prepared to be responsive this week,” he said in an interview with Bloomberg. “If we have to raise more capital, we will do it.” Mr. Brown, who is replacing ousted executive Gary Dunton, also said that he has been working with Mr. Dinallo to save the insurer. In the last 60 days, the company has raised more than $2.6 billion in capital. MBIA would be the second monoline insurer in recent days to break up its guarantee business if it decides to go that route. Last week, Financial Guaranty Insurance Co. filed a request with the New York State Insurance Department to create a new entity for its muni bond insurance operations, and keep its structured finance guarantees within FGIC.