MBIA Insurance Corporation

The short description of MBIA, Inc. goes like this: it’s a large-scale financial services firm, originally founded in 1973. That makes it sound like one of dozens of big-time Wall Street firms...but the simple description short-changes the firm’s importance. Like calling Game of Thrones a show about people who ride horses.

MBIA’s signature product line involves offering insurance to municipalities that issue bonds. So if your city sells bonds to build a firehouse, it will buy a policy from MBIA. The policy gives investors a guarantee that they'll get paid. If your town defaults, the insurance will kick in and cover the money owed to investors...both interest and principal.

Because of the guarantees, local governments with MBIA backing can keep their borrowing costs low. It helps get those firehouse-type projects funded.

Also, it means that MBIA provides the backstop for a major asset class, a fact that makes the firm a quiet centerpiece in the U.S. financial system.