Monoline

A monoline is any business that specialises in one particular financial services area, which could in theory be anything from mortgages to car insurance.

A monoline is any business that specialises in one particular financial services area, which could in theory be anything from mortgages to car insurance.

However recently the term has been used to describe niche but important companies like Ambac Assurance, a bond insurance firm that makes a living by selling credit derivatives like credit default swaps. These in turn are bought by worried holders of asset backed bonds for which the overall return and ultimate repayment is determined by the performance of other related products like high risk subprime - mortgages.

The monoline insurers depend heavily on retaining a AAA rating from the ratings agencies like Moodys, Standard and Poors and Fitch a downgrade would have an instant and detrimental knock on effect on the credit rating of the bonds they have insured, further reducing the value of them as collateral (security for other loans) in the hands of their owners.

Most Popular

Is it cheaper to leave the heating on low all day?
Personal finance

Is it cheaper to leave the heating on low all day?

The weather is getting colder and energy bills are rising, but is it really cheaper to leave the heating on low all day or should you only turn it on …
1 Dec 2022
Radiator vs electric heater – which is cheaper?
Personal finance

Radiator vs electric heater – which is cheaper?

We compare the costs, pros and cons of radiators and electric heaters and see which one will help keep your energy bill as low as possible.
28 Nov 2022
The pros and cons of smart meters – should you switch?
Personal finance

The pros and cons of smart meters – should you switch?

A smart meter can help you keep tabs on your energy usage, but is it better than a regular meter? We take a look at smart meters vs regular meters.
2 Dec 2022