EXHIBIT 24.07

                           AMBAC FINANCIAL GROUP, INC.

                                Power of Attorney
                                -----------------


                 KNOW ALL MEN BY THESE PRESENTS that the undersigned director of
           Ambac Financial Group, Inc., a Delaware corporation, hereby
           constitutes and appoints each of Frank J. Bivona and Anne G. Gill, as
           his true and lawful attorney-in-fact and agent, with full power of
           substitution, for him and in his name, place and stead, in any and
           all capacities, to sign the Annual Report on Form 10-K for the year
           ended December 31, 2001, to be filed with the Securities and Exchange
           Commission and the New York Stock Exchange, and any and all
           amendments thereto, and any and all instruments and documents filed
           as a part of or in connection with the said Form 10-K or amendments
           thereto, and does hereby grant unto each said attorney-in-fact and
           agent full power and authority to do and perform each and every act
           and thing requisite and necessary to be done in and about the
           premises, as fully to all intents and purposes as he or she might or
           could do in person, hereby ratifying and confirming all that each
           said attorney-in-fact and agent shall do or cause to be done by
           virtue hereof.

                 IN WITNESS WHEREOF, the undersigned has subscribed these
           presents as of this 26/th/ day of March, 2002.


                                                          /s/ W. Grant Gregory
                                                          --------------------
                                                          W. Grant Gregory