Argentina's Congress has approved a law preventing depositors from withdrawing funds from their bank accounts, as the country tries to avert a total collapse of the banking system. 

The legislation allows banks to hold onto depositors' funds pending appeals of lower court decisions allowing savers access to their frozen savings. 

At the same time, Argentine news reports say President Eduardo Duhalde may name the country's ambassador to the European Union, Roberto Lavagna, as the new economy minister. 

Mr. Duhalde is searching for a new financial chief to replace Jorge Remes Lenicov who will step down Friday. 

The country is now in its third day of a four-day bank holiday, called to allow lawmakers to debate the legislation and prevent a massive flight of capital out of the country. 

The government is seeking about $9 billion in loans from the International Monetary Fund to emerge from the worsening economic crisis. The already tough negotiations were dealt a major blow by the resignation of Mr. Lenicov. 

In Washington, U.S. Treasury Secretary Paul O'Neill said the international community would continue to urge reforms before granting new loans. 

President Duhalde attempted to demonstrate good will on Wednesday by signing a 14-point agreement with Argentina's provincial governors, pledging to work together to revive the economy and balance the budget. 

Meanwhile, The New York Times reports some governors have dropped hints that Mr. Duhalde should resign, so new elections could be held. The governor of San Juan province, where police have clashed daily with demonstrators, says he was submitting his own job to a vote in a few weeks. 

Some information for this report provided by AP.

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