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.
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