(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 RICHARD B. GROSS, 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, 1997, 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 8th day of March, 1998.



                                         /s/ C. Roderick O'Neil
                                         ----------------------
                                         C. Roderick O'Neil