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Canadian banks are scheduled to step into the earnings spotlight this week, with third-quarter reports coming from Bank of Montreal (NYSE: BMO), Bank of Nova Scotia (NYSE: BNS), Canadian Imperial Bank of Commerce (NYSE: CM), Royal Bank of Canada (NYSE: RY), and Toronto-Dominion Bank (NYSE: TD). While Canadian banks on the whole held up better than their U.S. counterparts during the financial crisis, these five are expected to report that their earnings are still declining in the most recent quarter.

With the meltdown of US banks, I'm not surprised that the smaller Canadian banks have now become (relatively) bigger. Among the top 10 North American banks (based on market cap), three of them are Canadians: #3. Royal Bank of Canada (RY), #6. Toronto-Dominion Bank (TD) and # 8. Bank of Nova Scotia (BNS).

US banks suffered tens of billions in "toxic-asset" write-downs, dividend cuts, and the need for huge capital infusions. Are Canadian banks safe? I believe they might have a very good chance to survive and continue to provide secure dividends for the following reasons:

With all the talk about creating a “bad” bank in the U.S. to place non-performing or questionable assets, it seems appropriate for an investor to scour the world in search of possible “good” banks.

Bank of Nova Scotia (BNS) has played it safe and smart, writes Barron's, largely avoiding the mistakes of U.S. peers. The bank is ready to shine when global markets start to recover.