Worldwide, banks experience liquidity shortages from time to time, and South African banks are no exception. As the banker of banks and as one of its functions, a central bank, in the normal course of business, provides banks experiencing liquidity shortages with much needed liquidity through its accommodation facility. In the case of the South African Reserve Bank ("SARB"), the accommodation facility is available to all registered banks on a daily basis by means of the repurchase-agreement system, and liquidity is provided only on condition that the relevant bank provides the SARB with eligible assets as security. When the eligible assets of a particular bank have been depleted and the liquidity shortage of that bank persists, the SARB, may in its discretion provide such a bank with a lender-of-last-resort facility. This facility is provided against the provision of assets, other than eligible assets, as security, and the facility is provided only in exceptional cases. This facility will generally be provided to a bank only when the bank is solvent and its liquidity need is of a short-term nature. In the case of FBC Fidelity Bank Limited ("FBC"), the bank experienced a liquidity shortage during the fourth quarter of 1999 as a result of a so-called run on the bank. FBC then approached the SARB for a lender-of-last-resort facility. After due consideration, the SARB provided FBC with a lender-of-last-resort facility, against the discounting of securities in favour of the SARB by FBC, which was deemed necessary to restore the liquidity position of FBC. The facility to FBC is fully secured, and since FBC is solvent, the full amount will be repaid in due course. In cases when a liquidity shortage is not restored by means of the lender-of-last- resort facility, a curator is appointed to the bank involved to stem the tide of deposit withdrawals. This was indeed necessary in the case of FBC and is public knowledge. This support was provided in the interest of the banking sector.The facility provided to FBC by the SARB was that of a lender-of-last-resort facility, not a lifeboat. The lender-of-last-resort facility is separate and distinct from a lifeboat, which is used in a situation of extreme systemic risk.