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catoismymotor (41.70)

Default on your loan? The bank pops a cork!

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August 21, 2009 – Comments (3)

Tempo del partito!   Italian banks may take ham and wine as collateral

Minister backs plan to accept high-quality wines and prosciutto from struggling producers

Tom Kington in Rome

guardian.co.uk

Wednesday 19 August 2009 17.01 BST

 

The plan follows an Italian tradition of accepting wheels of parmesan cheese as loan collateral

 

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.

"We've done it with cheese, why not with prosciutto and good wines like Brunello di Montalcino and chianti classico?" said Gianni Zonin, chairman of the Banca Popolare di Vicenza and head of wine producer Zonin.

"This is a great idea, it has my blessing," said Luca Zaia, the Italian agriculture minister.

The Italian bank Credito Emiliano has long stored hundreds of thousands of parmesan wheels, worth about ¤300 each, in warehouses as collateral while they age.

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.

Legs of cured ham, or prosciutto crudo, weighing about 10kg, can sell for hundreds of euros after months of curing in controlled conditions, while bottles of Brunello di Montalcino are regularly snapped up for the same amount.

"We may start off with accepting wine as collateral, but I would prefer the Italian banking association to launch an industry-wide scheme which involves a range of products," said Zonin. "This will help producers in times of crisis as well as when the economy picks up."

Zaia said he would take the matter up with the Italian treasury minister.

"Apart from meeting the need of companies for liquidity, this proposal also recognises that our true gold reserves are the excellent products we make in Italy," he said.

3 Comments – Post Your Own

#1) On August 21, 2009 at 10:02 AM, catoismymotor (41.70) wrote:

Italian Capitalism: You have two cows. You don't know where they are. You break for lunch.

I would like it if this idea would take hold in the states. Is there something like this already in place?

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#2) On August 21, 2009 at 11:14 AM, russiangambit (29.13) wrote:

Italy is hilarious. I don't think they completely left the Middle Ages yet.

No, there is nothing like this in the US. In the US everything is by the procedure book. If it is not in the procedure, it can't be done.

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#3) On August 21, 2009 at 11:24 AM, catoismymotor (41.70) wrote:

I imagine some kind of pawn shop in southern California catering to an idea like this. "I have a bass boat, a black ceramic jaguar sculpture and a bottle of Bollinger Champagne, 1973, I need to pawn."

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