Ever Considered Using Parmesan As Collateral?

If you find yourself in need of a loan and your only assets are in the form of Parmesan cheese, you are in luck.

If you find yourself in need of a loan and your only assets are in the form of Parmesan cheese, you are in luck: the Credito Emiliano bank in the Emiliano region of Italy will accept Parmigiano-Reggiano, a valuable regional cheese, as collateral.

The bank even has a special warehouse to store the cheese, presumably so that it won't be spoiled by the stench of money at the bank. The Tagliate warehouse is filled with about 160 million Euro worth of Parmigiano-Reggiano, and the cheeses become more valuable as they age, making for some ripe profits.

Storing the cheese in a bank warehouse even saves farmers storage costs, as the cheese wheels are kept in climate-controlled vaults while the loans are being paid off. Since the cheese needs to mature for up to thirty-six months before it can be sold, the farmer benefits from the time the cheese spends in the warehouse.

If the loans are defaulted on, the cheese is sold when it reaches its maturation point. The bank is also able to check on the cheese and make sure there are no issues with quality, such as bubbling or cracking, which can harm the value of the cheese. Aside from spoilage, and hungry employees, there is little risk to this type of banking, and of course the bank also accepts traditional forms of collateral and currency.

The Emiliano region is a major producer of Parmigiano-Reggiano, so this way of banking makes sense locally. It has yet to be seen whether Holland will follow suit with Gouda banks, or whether French banks will allow deposits of Camembert. A Roquefort bank would certainly need to hire tellers with a weak sense of smell. In any case, Credito Emiliano has shown that there is more than one way for a bank to make some extra Cheddar.

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