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Now Accepting Cash, Credit, and Cheese


Try raiding the fridge before heading to the bank.

Hey buddy, can you spare a wheel of Parmigiano-Reggiano?

Italy is in the throes of its fourth recession since 2002, with the country's economy expected to contract 5.3% this year. And, for many producers, cheese seems to be the only way out.

Credito Emiliano, an Italian bank in the Emilia-Romagna region, has been accepting parmesan cheese as collateral since the early 1950's-and is now considering treating prosciutto, olive oil, and balsamic vinegar the same way, according to Steve Jenkins, one of America's foremost cheese experts.

The bank does not store the cheese on-site-this is the purview of a unit called Magazzini Generali delle Tagliate, which holds 440,000 wheels worth a little less than $190 million.

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Bank employee Fabrizio Giberti, deep inside the vault

"This mechanism is our life blood," Giuseppe Montanari, a parmesan producer, told Bloomberg News. "It's a great way to finance our expenses at convenient rates, and the bank doesn't risk much because they can always sell the cheese."

William Bizzarri, who oversees the cheese held by the bank, told the news agency that "the bank offered loans for as long as 24 months, equal to the time it takes the parmesan to age, at the euro interbank offered rate plus 0.75 percentage point to two percentage points. The bank gives producers as much as 80% of the value of the cheese, based on current market prices."

Bizzarri said parmesan deposits are up about 10% because of Italy's fiscal situation.

I asked Jenkins, a board member of the American Cheese Society, author of The Cheese Primer, known among foodies as the "cheese bible," for his take.

Steve Jenkins and friends

"Europe has an outstanding tradition of barter unlike America, so it's not altogether surprising that banks are taking these treasures as collateral," said Jenkins, the first American to be honored with France's prestigious Chevaliers du Taste.

Brian DiMarco of boutique wine importer/distributor The Barterhouse said, "When the economy is struggling, it's nice to know that good, old-fashioned, top-quality products are still worth something."

With that in mind, I'd recommend against offering your friendly loan officer at JPMorganChase (JPM), Bank of America (BAC), or Wells Fargo (WFC) a wedge of anything edible to secure a loan.

They likely won't accept it-and it could be the possibility of theft that frightens them from doing so.

Bizzarri told Bloomberg News that 570 wheels of parmesan, each worth about 300 euros, were stolen in February by thieves who tunneled into one of the company's cheese caves.

"Thank heavens we caught the robbers before they grated it," he said.
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