Shares in bond insurers MBIA and Ambac fell sharply on Friday amid concerns that a rival US bond insurer planned by billionaire Warren Buffett will eat into their ability to win new business and further damage efforts to boost their flagging capital bases.

Mr Buffett’s Berkshire Hathaway group was expected on Friday to receive a licence from the New York state insurance regulator for the new bond insurer. It hoped to start writing business on Friday or on Monday. It will then seek licences in other states.