Only a few weeks ago governments around the world moved quickly to introduce guarantee support for their domestic banks. In the global wholesale markets, the guarantees were intended, among other things, to allow each country's banks to compete for funding on an equal footing. However, evidence is now emerging that the guarantee support is less than equal.Issuance by British banks with a UK government guarantee continued last week with Lloyds TSB Bank issuing €2.0 billion and ₤1.4 billion of three-year bonds on Monday and Nationwide Building Society issuing ₤1.5 billion of bonds on Wednesday.Interestingly, the bonds from both issuers were priced by the market at mid-swaps plus 18 basis points, regardless of the issuer or the currency of issue. This ignores the all-up costs to the banks after accounting for the cost of the government guarantee. Barclays was the first to issue UK government guaranteed bonds, almost a month ago. It raised three-year funds in euros at mid-swaps plus 25 bps. HBOS was next, raising two-year euros at mid-swaps plus 20 bps. Then, the week before last, Royal Bank of Scotland raised three-year euros and pounds at mid-swaps plus 20 bps.Bearing in mind that Barclays and Lloyds carry 'AA/Watch Neg' ratings from Standard & Poor's, while RBS is rated 'AA-/Stable', HBOS 'A+/Watch Pos' and Nationwide 'A+/Stable', it appears that the market is simply pricing the value of a UK government guarantee, and this is improving as credit spreads have contracted from 25 bps to 18 bps.The French government agency, Société de Financement de l'Economie Française (SFEF), which was established only last month to provide loans to the French banks, made its debut in the Euromarket last week. SFEF is rated triple A by the three main rating agencies and can issue up to €25 billion of bonds with maturities up to five years.For its debut, SFEF issued €5.0 billion of three-year bonds at mid-swaps plus 5 bps, some 13 bps less than the most recent British bank issues. The explanation is that despite SFEF being owned jointly by the French banks and the French government (with a minority position), SFEF is a government agency and the bonds will enter the agency indices. This is better than simply holding a government guarantee.Given the precedents that have now been set, where does this leave the Australian and New Zealand banks, and perhaps more critically, the US banks?Dealing with the latter first, the US banks appear to have been left out in the cold. While US banks have been able to avail themselves of a US government guarantee of their wholesale funding for approximately a month now, no issuance has occurred. S&P has highlighted the problem with the guarantee, pointing out that for guaranteed bond issues to be rated 'AAA' the guarantee must be unconditional, irrevocable and timely. US banks such as JPMorgan, Bank of America, Citibank and Wells Fargo have complained that the guarantee is not good enough. It is certainly not timely, when to claim under the guarantee, normal bankruptcy proceedings must