The PSI is "locked"

It was agreed that the impairment of the bond portfolio of the private sector, totaling 206 billion euros, will come at 50% of the nominal value, corresponding to a cumulative loss of 70%. Of the remaining 50% apart from the haircut, 15% is expected to be given to two-year EFSF bonds and the remaining 35% to 30-year Greek government bonds with a weighted average interest rate of 3.7%. The rate will increase based on a clause associated with the growth of the economy. Based on the supervisory rules and capital adequacy, the new bonds will be valued at current prices, leading the charge in net present value (NPV) in the order of 70%. To assess the current effects, one should subtract the 21% impact of the original PSI in July from this amount, which has already been recorded and reflected in the results of the banks. 

However, the actual total cost is not determined solely by the rate of 70% and the tax treatment of losses should be taken into account as well. Currently there is a provision for the offset against future profits of 5 years. Yet, this period may be extended considerably. 

In addition, the accounting treatment of losses depends on the distribution of the individual bond portfolios of each bank. The final effective charge can thus be configured within a range between 58% and 65%. It is worth noting that over time the real damage on retained bonds will be decreasing as they approach their maturity. 

Reportedly, officials have already agreed to exclude individuals who hold bonds worth up to 100,000 euros, that is the equivalent of guaranteed deposits, from the basic agreement of the PSI. However, holders will be returned the original invested capital and not the value of bonds at face value. That is, if an individual had purchased Greek government bonds at the price of 75 they will not receive 100, which is the nominal value, but the 75 that constitutes their capital.