The U.S. Federal Reserve announced on Wednesday that it will end its annual program to lend money to the government, saying that it was running out of liquidity.
The program has provided nearly $6 trillion in emergency liquidity since it was set up in 2008.
The Fed’s statement was the latest indication that the government may be in a financial bind, with many banks reporting record low borrowing costs and large amounts of money in reserve.
The statement came after the Treasury Department warned that it may have to declare bankruptcy in the next three months if it doesn’t receive more cash from the Fed.
The Treasury Department said it will issue a report next week on how the Fed plans to replenish its $4.4 trillion in reserves.
The Fed announced the end of its emergency lending program, which had helped spur economic growth and create millions of jobs, after the U.N. and other international groups accused it of failing to keep up with soaring inflation and other factors.
Fed chair Janet Yellen said the central bank will focus on its primary focus of meeting its monetary policy goals and reducing the economic gap between rich and poor.
She said it is essential to maintain its “strong” growth trajectory and maintain the pace of monetary easing, or the Fed’s ability to keep pumping money into the economy.
The Fed’s announcement was made on the same day as the Bank of Japan released its first report since it started the long-awaited “QE-2.”
The central bank said it would focus on reducing the rate of inflation and the amount of money it can buy with reserves.
It also said it plans to gradually ease its monetary policies.