Piles of edible gold from an Italian bank
Highlights of history
Italian bank uses cheese as loan collateral
The cheese is kept in huge cellars, cleaned, turned and sometimes tasted
The bank charges between 3% and 5% interest, depending on the quality of the cheese
Editor’s Note: Isa Soares is a journalist at Marketplace Europe. Follow her on Twitter.
From the outside, the Italian Credem Bank looks like any other high security operation.
And indeed, behind the barbed wire and electronic fence are heaps of golden blocks. But they’re not made of precious metal – rather, they’re aging wheels of Parmesan cheese.
As I enter, I am struck by the pungent smell and then by the size of the vaults.
Row after row, on twenty stacked shelves, 430,000 wheels of Parmesan. They are worth up to 190 million euros.
The wheels are stored here as part of a cash-for-cheese loan that started with the Credem bank, but dates back to the Medici era.
Simply put, the bank takes cheese from local Parmesan producers in exchange for a cheap loan. He charges between 3% and 5% interest, depending on the quality of the cheese, and a fee to ensure the cheese matures properly in their air-conditioned and humidified cellar.
This mechanism ensures that during the two years of cheese ripening, credit continues to flow. In these difficult economic times, this allows producers to feed their livestock, pay their staff… and continue to produce. If for some reason the cheese producer defaults on the loan, the bank has the cheese to sell.
So it’s no surprise, Credem treats every wheel like gold. They clean it, turn it over, pound it, prick it and from time to time even taste some batches.
Cristian Bertolini, an expert taster from the Parmigiano Reggiano consortium, tells me that each batch must meet strict criteria. If not, the cheese is downgraded, the Parmigiano Reggiano imprint is scraped off, and then it is sold simply as Italian cheese.
For the Caretti family, which has been producing cheese since 1925, the loan is a strong currency that has allowed them to continue doing what they love. At present, they have their own on-site safe, funded by the bank. Every now and then they still use the larger Credem vault.
It’s a strategy that paid off. Every day, they make thirty-two wheels of Parmigiano Reggiano, or nearly twelve thousand wheels per year.
Davide Caretti, who took over his father’s business, tells me frankly that it is his life; that he intends to do it forever. Not even the first few hours, hard work and 40 kilogram wheels can kill his dream. “It’s not hard work. It is a strong passion for me and for us ”, he declared.
It’s a passion as strong as the cheese itself, backed by a bank that takes a mature attitude to credit.