diff --git a/src/exchangedb/exchangedb.conf b/src/exchangedb/exchangedb.conf
index 1c22301ad..2bfcb2ca0 100644
--- a/src/exchangedb/exchangedb.conf
+++ b/src/exchangedb/exchangedb.conf
@@ -30,3 +30,7 @@ LEGAL_RESERVE_EXPIRATION_TIME = 7 years
 # What is the desired delay between a transaction being ready and the
 # aggregator triggering on it?
 AGGREGATOR_SHIFT = 1 s
+
+# How many concurrent purses may be opened by a reserve
+# if the reserve is paid for a year?
+DEFAULT_PURSE_LIMIT = 1
\ No newline at end of file
diff --git a/src/exchangedb/pg_do_reserve_open.c b/src/exchangedb/pg_do_reserve_open.c
index f7a3a5f7b..ad18cb936 100644
--- a/src/exchangedb/pg_do_reserve_open.c
+++ b/src/exchangedb/pg_do_reserve_open.c
@@ -47,8 +47,10 @@ TEH_PG_do_reserve_open (
     TALER_PQ_query_param_amount (total_paid),
     TALER_PQ_query_param_amount (reserve_payment),
     GNUNET_PQ_query_param_uint32 (&min_purse_limit),
+    GNUNET_PQ_query_param_uint32 (&pg->def_purse_limit),
     GNUNET_PQ_query_param_auto_from_type (reserve_sig),
     GNUNET_PQ_query_param_timestamp (&desired_expiration),
+    GNUNET_PQ_query_param_relative_time (&pg->legal_reserve_expiration_time),
     GNUNET_PQ_query_param_timestamp (&now),
     TALER_PQ_query_param_amount (open_fee),
     GNUNET_PQ_query_param_end
diff --git a/src/exchangedb/pg_helper.h b/src/exchangedb/pg_helper.h
index e0a4be49d..84d4c22b7 100644
--- a/src/exchangedb/pg_helper.h
+++ b/src/exchangedb/pg_helper.h
@@ -82,6 +82,12 @@ struct PostgresClosure
    */
   unsigned long long prep_gen;
 
+  /**
+   * Number of purses we allow to be opened concurrently
+   * for one year per annual fee payment.
+   */
+  uint32_t def_purse_limit;
+
   /**
    * Did we initialize the prepared statements
    * for this session? (To be replaced with @e prep_gen.)
diff --git a/src/exchangedb/plugin_exchangedb_postgres.c b/src/exchangedb/plugin_exchangedb_postgres.c
index 1bb835877..a369b7107 100644
--- a/src/exchangedb/plugin_exchangedb_postgres.c
+++ b/src/exchangedb/plugin_exchangedb_postgres.c
@@ -15567,6 +15567,7 @@ libtaler_plugin_exchangedb_postgres_init (void *cls)
   const struct GNUNET_CONFIGURATION_Handle *cfg = cls;
   struct PostgresClosure *pg;
   struct TALER_EXCHANGEDB_Plugin *plugin;
+  unsigned long long dpl;
 
   pg = GNUNET_new (struct PostgresClosure);
   pg->cfg = cfg;
@@ -15625,6 +15626,21 @@ libtaler_plugin_exchangedb_postgres_init (void *cls)
                                "exchangedb",
                                "AGGREGATOR_SHIFT");
   }
+  if (GNUNET_OK !=
+      GNUNET_CONFIGURATION_get_value_number (cfg,
+                                             "exchangedb",
+                                             "DEFAULT_PURSE_LIMIT",
+                                             &dpl))
+  {
+    GNUNET_log_config_missing (GNUNET_ERROR_TYPE_WARNING,
+                               "exchangedb",
+                               "DEFAULT_PURSE_LIMIT");
+    pg->def_purse_limit = 1;
+  }
+  else
+  {
+    pg->def_purse_limit = (uint32_t) dpl;
+  }
 
   if (GNUNET_OK !=
       TALER_config_get_currency (cfg,
diff --git a/src/exchangedb/procedures.sql b/src/exchangedb/procedures.sql
index 1e9b6b166..90fb7d321 100644
--- a/src/exchangedb/procedures.sql
+++ b/src/exchangedb/procedures.sql
@@ -2183,8 +2183,10 @@ CREATE OR REPLACE FUNCTION exchange_do_reserve_open(
   IN in_reserve_payment_val INT8,
   IN in_reserve_payment_frac INT4,
   IN in_min_purse_limit INT4,
+  IN in_default_purse_limit INT4,
   IN in_reserve_sig BYTEA,
   IN in_desired_expiration INT8,
+  IN in_reserve_gc_delay INT8,
   IN in_now INT8,
   IN in_open_fee_val INT8,
   IN in_open_fee_frac INT4,
@@ -2194,9 +2196,161 @@ CREATE OR REPLACE FUNCTION exchange_do_reserve_open(
   OUT out_no_funds BOOLEAN)
 LANGUAGE plpgsql
 AS $$
+DECLARE
+  my_balance_val INT8;
+DECLARE
+  my_balance_frac INT4;
+DECLARE
+  my_cost_val INT8;
+DECLARE
+  my_cost_tmp INT8;
+DECLARE
+  my_cost_frac INT4;
+DECLARE
+  my_years_tmp INT4;
+DECLARE
+  my_years INT4;
+DECLARE
+  my_needs_update BOOL;
+DECLARE
+  my_purses_allowed INT8;
+DECLARE
+  my_expiration_date INT8;
+DECLARE
+  my_reserve_expiration INT8;
 BEGIN
 
--- FIXME: implement!
+-- FIXME: use SELECT FOR UPDATE?
+SELECT
+  purses_allowed
+ ,expiration_date
+ ,current_balance_val
+ ,current_balance_frac
+INTO
+  my_purses_allowed
+ ,my_reserve_expiration
+ ,my_balance_val
+ ,my_balance_frac
+FROM reserves
+WHERE
+  reserve_pub=in_reserve_pub;
+
+IF NOT FOUND
+THEN
+  -- FIXME: do we need to set a 'not found'? 
+  RETURN;  
+END IF;
+
+-- Do not allow expiration time to start in the past already
+IF (my_reserve_expiration < in_now)
+THEN
+  my_expiration_date = in_now;
+ELSE
+  my_expiration_date = my_reserve_expiration;
+END IF;
+
+my_cost_val = 0;
+my_cost_frac = 0;
+my_needs_update = FALSE;
+my_years = 0;
+
+-- Compute years based on desired expiration time
+IF (my_expiration_date < in_desired_expiration)
+THEN
+  my_years = (31535999999999 + in_desired_expiration - my_expiration_date) / 31536000000000;
+  my_purses_allowed = in_default_purse_limit;
+  my_expiration_date = my_expiration_date + 31536000000000 * my_years;
+END IF;
+
+-- Increase years based on purses requested
+IF (my_purses_allowed < in_min_purse_limit)
+THEN
+  my_years = (31535999999999 + in_desired_expiration - in_now) / 31536000000000;
+  my_expiration_date = in_now + 31536000000000 * my_years;
+  my_years_tmp = (in_min_purse_limit + in_default_purse_limit - my_purses_allowed - 1) / in_default_purse_limit;
+  my_years = my_years + my_years_tmp;
+  my_purses_allowed = my_purses_allowed + (in_default_purse_limit * my_years_tmp);
+END IF;
+
+-- Compute cost based on annual fees
+IF (my_years > 0)
+THEN 
+  my_cost_val = my_years * in_open_fee_val;
+  my_cost_tmp = my_years * in_open_fee_frac / 100000000;
+  IF (CAST (my_cost_val + my_cost_tmp AS INT8) < my_cost_val)
+  THEN
+    out_open_cost_val=9223372036854775807;
+    out_open_cost_frac=2147483647;
+    out_final_expiration=my_expiration_date;
+    out_no_funds=true;
+    RETURN;
+  END IF;
+  my_cost_val = CAST (my_cost_val + my_cost_tmp AS INT8);
+  my_cost_frac = my_years * in_open_fee_frac % 100000000;
+  my_needs_update = TRUE;
+END IF;
+
+-- check if we actually have something to do
+IF NOT my_needs_update
+THEN
+  out_final_expiration = my_reserve_expiration;
+  out_open_cost_val = 0;
+  out_open_cost_frac = 0;
+  out_no_funds=FALSE;
+  RETURN;
+END IF;
+
+-- Check payment (coins and reserve) would be sufficient.
+IF ( (in_total_paid_val < my_cost_val) OR
+     ( (in_total_paid_val = my_cost_val) AND
+       (in_total_paid_frac < my_cost_frac) ) )
+THEN
+  out_final_expiration=my_reserve_expiration;
+  out_open_cost_val = my_cost_val;
+  out_open_cost_frac = my_cost_frac;
+  out_no_funds=TRUE;
+  RETURN;
+END IF;
+
+-- Check reserve balance is sufficient.
+IF (my_balance_val > in_reserve_payment_val)
+THEN
+  IF (my_balance_frac >= in_reserve_payment_frac)
+  THEN
+    my_balance_val=my_balance_val - in_reserve_payment_val;
+    my_balance_frac=my_balance_frac - in_reserve_payment_frac;
+  ELSE
+    my_balance_val=my_balance_val - in_reserve_payment_val - 1;
+    my_balance_frac=my_balance_frac + 100000000 - in_reserve_payment_frac;
+  END IF;
+ELSE
+  IF (my_balance_val = in_reserve_payment_val) AND (my_balance_frac >= in_reserve_payment_frac)
+  THEN
+    my_balance_val=0;
+    my_balance_frac=my_balance_frac - in_reserve_payment_frac;
+  ELSE
+    out_final_expiration=my_reserve_expiration;
+    out_open_cost_val = my_cost_val;
+    out_open_cost_frac = my_cost_frac;
+    out_no_funds=TRUE;
+    RETURN;
+  END IF;
+END IF;
+
+UPDATE reserves SET
+  current_balance_val=my_balance_val
+ ,current_balance_frac=my_balance_frac
+ ,gc_date=my_reserve_expiration + in_reserve_gc_delay
+ ,expiration_date=my_reserve_expiration
+ ,purses_allowed=my_purses_allowed
+WHERE
+ reserve_pub=in_reserve_pub;
+
+out_final_expiration=my_reserve_expiration;
+out_open_cost_val = my_cost_val;
+out_open_cost_frac = my_cost_frac;
+out_no_funds=FALSE;
+RETURN;
 
 END $$;