Italy is banking on cheese, literally

    9:53 AM, Aug 16, 2013   |    comments
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    ITALY (CNN) -- Producers of Italy's famed parmesan cheese have been storing their product in bank vaults. It's part of a banking program that accepts the expensive cheese as collateral for loans.

    At Credem Bank they're not taking any risks because inside, under lock and key are some of Italy's most solid assets. Bank vice president Alfredo Germini says, "Every year, we store 430 thousand wheels of parmesan cheese at a total value of 190 million Euros."

    These precious walls of cheese belong to the bank for now, at least. They're part of a cash-for-cheese loan that started 50 years ago with Credem Bank, but the practice actually dates back to the Medici era in around the 15th century.

    More than 20 parmigiano reggiano producers and wholesalers keep their cheese in these bank vaults. In return, they receive a cheap loan. For the bank, it's almost risk-free. If the producer defaults on its debts, the bank holds on to the cheese and sells it on and you'll be surprised to know this asset holds on to its value.

    This maturing interest, which is valued at 500 Euros per wheel, retail price, stays here for two years. In that time, the bank charges between three to five percent interest and a fee for making sure the cheese matures properly in their air-conditioned, humidified vault.

    It's not only a case of staring at the cheese though. Periodically, experts are hired in to ensure they are maturing well. They hammer it, prick it, and savor certain batches. Expert taster Cristian Bertolini says, "We want to taste it. That is very important because we have to eat the cheese at the end of the process."

    For the cheese producers, like the Caretti family, who have cattle to feed and staff to pay, this precious liquid is hard currency. Davide Caretti says, "We still use the bank to anticipate money of the cheese. So we must keep the cheese inside the vault until we pay the bank."

    The two-years it takes the cheese to mature, allows them to keep on producing. Every day they make 32 wheels of parmesan, that's almost 12,000 wheels a year. Caretti says, "It is not hard work, it's a strong passion for me and for us."

    A passion as strong as the cheese itself backed by a bank that takes a mature attitude to lending.

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