Banking on Wine, Cheese and Ham

Real estate turned out to not be such good collateral, maybe wine, cheese and ham is better.

From the Guardian (UK)...

Italian bank vaults may soon resemble well stocked delicatessens if a plan goes ahead to accept expensive wines and dry-cured hams as collateral on bank loans from crisis-hit producers.

The idea, which was launched this week by an influential Italian bank chairman and wine producer, was backed by an Italian minister and follows the tradition of Italian banks storing massive wheels of parmesan cheese as loan collateral.

Since the bank can sell the cheese if creditors default, it can afford to offer low interest rates to an industry which is suffering from recession and supermarket discounting.

Caption (AP Photo): A view of the Credito Emiliano bank temperature-controlled vault stacked with aging Parmesan cheese in Montecavolo, near Reggio Emilia, Italy. Row upon row of 85-pound wheels of Parmesan cheese, stacked 33 feet high at a secure warehouse, age for as many as two years under the care of bank employees trained in the centuries-old art of Parmesan making. Parmesan producers to pump cash into their business by using their product as collateral while it is otherwise sitting on a shelf for the long aging process. While the mechanism was not born out of the current economic crisis, dating rather from Italy's post-World War II years, producers say it is ever more important because it ensures that credit keeps flowing during otherwise tight times.