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The government bonds swap will leave the Greek banks with € 5 billion less, reported Dow Jones Newswire, citing a source from the Ministry of Finance. Until September 9, the banks will have to announce formally their intention to participate in the restructuring of the Greek debt and the whole procedure should be completed by October 15. In accordance with the European financial institutions, Greek banks hold 65 per cent of the government bonds with maturities of 1 to 10 years.

The total bonds held by the four largest financial institutions, National Bank of Greece, Eurobank EFG, Alpha Bank and Piraeus Bank, maturing by 2010, are amounting to € 27.5 billion. These four banks hold bonds for € 32 billion too, maturing after 15 years. The same source told Dow Jones Newswire that the banks would add the haircut Greek debt to the results for the second quarter of 2011. The French Credit Agricole, which owns the Greek Emporiki, has already done this.  Yesterday, it cancelled € 220 million from the debt of the Greek state and reported for the same period a reduction in profit of 10.6 per cent or € 339 million. The participation in the Greek roll-over influenced the German bank WestLB, which cancelled another € 29 million for Athens and reported profits reduced by € 36 million.

This sad situation on the Greek banking sector swept the Athens Stock Exchange, which reported for a seventh day in a row not just loss, not just drop in the index but investors panic and sale of local banks’ shares. They reached their 20-year minimum, their value now is shameful and there is no need to mention it, and the index of the Stock Exchange stopped at the insignificant 880 points. The largest losses suffered Eurobank EFG, Alpha Bank and Piraeus Bank.

"In the last month, bank shares are tumbling constantly. The shares of companies that have nothing to do with the financial sector and the Greek debt are tumbling too. At the same time, it is clear for all that the value of Greek banks is much higher, they have huge assets both in Greece and abroad. They have the opportunity to benefit from the Financial Stability Facility, which avails € 30 billion. However, the government does not intervene to stop the collapse of the Stock Exchange. If this continues like the government's efforts then the sacrifices of the Greek people will be in vain," said in an open letter to the Minister of Finance the President of the Association of the Members of the Athens Stock Exchange Alexandros Moraitakis, who represents one million and 500 thousand investors.

Obviously, the state of the Greek economy is really serious because the president to the U.S. Federal Reserve Ben Bernaki will deliver a special speech in the next hours dedicated to the Greek financial chaos.

Meanwhile, the Greek government continues to put pressure on banks, this time on those in Switzerland. According to the Financial Times, Athens and Zurich are close to sign an agreement under which the Swiss banks would be required to pay the Greek government between 10 and 20 per cent of the interest rates they receive from the investment of Greek taxpayers in them. According to the same edition, the Greek taxpayers have invested € 150 billion in Swiss banks.