One Italian bank is keeping alive a tradition which, we are told, goes back to the Medici era and it certainly looks quaint today: it takes cheese from local Parmesan producers in exchange for cheap loans.
Walking into a vault of Italy’s Credem Bank, CNN‘s Isa Soares reports being “hit by the pungent smell” of 430,000 wheels of Parmesan cheese, worth up to 190 million euros.
The Parmesan wheels were “stored here as part of a cash-for-cheese loan that started with Credem bank, but dates back to the Medici era”, Soares explains. (Scroll down for the video.)
1. Italy’s Credem Bank’s vaults hold 430,000 wheels of Parmesan cheese, worth up to 190 million euros.
Credem’s cheese loans are quite affordable. Soares explains:
[Credem] charges between 3% to 5% interest, depending on the quality of the cheese, and a fee for making sure the cheese matures properly in their air-conditioned, humidified vault.
Centuries of stacking cheese into its vaults has allowed the bank to acquire valuable expertise. Soares writes:
Credem treats each wheel like gold. They clean it, turn it, hammer it, prick it and from time to time even taste certain batches.
[E]ach batch has to meet strict criteria. If it doesn’t, the cheese is downgraded, the Parmigiano Reggiano imprint scraped off and then it’s sold simply as Italian cheese.
And Credem has every incentive to ensure that the cheese in their vaults matures to achieve the best quality possible: “if for whatever reason, the cheese producer defaults on the loan, the bank has the cheese to sell on”, Soares explains.
2. The Parmesan wheels stored in the bank’s vault are a part of a cash-for-cheese loan program.
The unconventional financial transaction works quite well for local producers. Soares writes:
For the Caretti family, who have been producing cheese since 1925, the loan is hard currency which has enabled them to keep doing what they love. Right now, they have their own vault on site, financed by the bank. From time to time, they still use the bigger Credem vault.
It’s a strategy that has paid off. Every day, they make thirty two wheels of Parmigiano Reggiano, adding up to almost twelve-thousand wheels a year.
So, here is a financial innovation that has survived the tests of time.
3. Cash-for-cheese loan is almost risk free — a CNN report.
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