BUENOS AIRES, Argentina Despite pressure to stop Argentina's financial system from collapsing, President Eduardo Duhalde crushed on Saturday market hopes he would forcibly transform billions of dollars of frozen bank deposits into bonds.

Instead, his Economy Ministry announced details of some new incentives that encourage Argentines to swap their savings for bonds -- slightly enhancing a scheme that has failed to attract many volunteers.

"There will not be mandatory bonds," Duhalde told a news conference. He added that the government would look for other ways to save from collapse banks, which lost billions of dollars after a bank freeze and a currency devaluation.

This week there was widespread market optimism the government would forcibly switch deposits into public bonds, a move that many analysts say is the only way of stopping banks from going bankrupt.

Banks do not have enough cash to meet demand amid a devastating four-year recession, a problem that in December led a previous government to freeze some $40 billion of savings, or half of all accounts, to stop a damaging run on banks.

The freeze has been a lightning rod for public anger and sparked the resignation of president Fernando de la Rua in December, ushering in a period of political chaos that saw four presidents leave office in only two weeks. In January, an emergency session of Congress appointed Duhalde as caretaker president in one of Latin America's largest economies.

Hoping to lift the freeze without destroying banks, Duhalde's new government introduced a voluntary swap, giving deposit holder's incentives for exchanging their savings for long-term government bonds. Many bonds were denominated in U.S. dollars, a safe-haven currency in Latin America.

Less than 1 percent of total bank deposits entered in the voluntary swap, according to media reports on Friday, the last day for depositors to make the exchange.

Bonds have the advantage of offering savers their money back, if only over the long term, while at the same time giving banks some liquidity to avoid bankruptcy.

But there were reportedly few takers as most Argentines preferred another government plan to have their cash returned in quotas in the devalued local currency over several years.

Other deposit holders have successfully appealed to the courts for legal rulings overturning the freezing of their accounts.

On Saturday, the Economy Ministry announced incentives for deposit holders to accept bonds, including allowing bonds to be used to buy shares on the stock exchange and new houses.

Private banks were given room to offer deposit holders special deals to encourage swaps, although details were unclear.

The ministry also blamed some local banks for not pushing the bond swaps hard enough with their clients.

A currency devaluation and seepage of savings through legal appeals has seen the value of frozen deposits fall to just over $16 billion. In June alone, some 1 billion pesos (some $270 million) were withdrawn following court orders.