Westpac's cracking of the ice over the frozen Samurai bond market in Japan is the latest in a series of capital market developments that augur well for Australian banks and the broader economy.In the first Samurai bond issue since Lehman Brothers went bust last year, Westpac has raised ¥245 billion ($4.4 billion) through the issue of fixed and floating rate bonds with three and five year maturities. The bank sold most of the debt to institutions in Japan but documented a minority of the loan as a Eurobond.This is not just another debt issue that will be pored over by industry aficionados for comparisons of the term sheet.It is a sign that one of the world's largest savings markets is once again open for business as a source for bank funding.At least one other Australian bank is believed to be finalising documentation for its own Samurai bond issue. Other major Australian banks would be expected to follow suit.Samurai bonds are yen-denominated debt sold in Japan by foreigners. They require very detailed documentation and are sold to institutional investors. In Westpac's case it received demand from 230 investors comprising institutions, life insurers, asset managers and regional banks.The Westpac issue was noteworthy for a number of reasons. It was the first issue by a foreign bank in Japan since September, it demonstrated a healthy appetite for such bonds and it emphasised the importance of the federal government's AAA guarantee of Australian bank funding.Westpac was able to get the jump on banks from other countries because the Australian government guarantee of wholesale funding was extended to Japanese yen from the word go. Other countries such as the UK were slow to include yen among the currencies where debt was guaranteed.The breakdown of the ¥245 billion raised was as follows: ¥11.8 billion in a three-year fixed tranche, ¥133 billion in a five-year fixed tranche, ¥56 billion in a five-year floating tranche and ¥44 billion in three-year fixed rate euro-yen notes.Since the Australian government guaranteed the wholesale borrowing in November the banks have completed about $55 billion in term funding in Australia, the United States, Asia and Europe.As a group, the Australian banks - including the Big Four, several regionals and Macquarie Bank - now rank second in the world behind the United States for the size of their recent debt raisings.The success in quickly raising huge volumes of term funding has to be set against the very high costs of funds relative to more normal times. Two years ago a Samurai bond could be done at 15 to 20 basis points over bank bills. The Westpac issue is believed to have come in at about 200 basis points over bank bills including the 70 basis points cost for the government guarantee. That is expensive funding that will inevitably be passed on to borrowers. Business Spectator