Federal Treasurer Wayne Swan says it would be an "act of madness" to remove the government's bank funding guarantee to teach lenders a lesson for lifting rates out of step with the central bank.Debate over the merit of the guarantee is cropping up again. One reason is the suggestion by ANZ's chief executive, Mike Smith, that it's time for all banks to dispense with the guarantee in the wholesale market.A second is the antagonism, such as it is, over the increase (by 10 basis points) in standard home loan interest rates last week by Commonwealth Bank, leading to suggestions that banks agree a pricing policy with the government as a condition of the guarantee.Swan told ABC Television's Lateline it would be irresponsible to remove the funding guarantee, which has been in place since October, in response."What the bank guarantee does is allow all Australian financial institutions, including the four major banks, to borrow on overseas markets so we can have credit flowing through this economy," he said."To take it away would be an act of madness."