The Canadian banks have been getting a lot of attention lately. Last October, the World Economic Forum rated them the best in the world, ahead of Sweden, Luxembourg and Australia.

Compared with their basket-case brethren in the U.S., they look positively healthy. They never took on excessive mortgage risk, as Canada was never awash with subprime mortgages or securitization of the loans after the fact. Things like "no documentation of income" never flew in Canada, where bankers have always tended to be pretty bankerish, generally demanding 20% down.

The Canadian economy hasn't been prone to economic booms and busts like the U.S.' Equities never went up as much in the dot-com heyday, and home prices increased over the last few years, but not like the overheated U.S. markets. Also, Canadians never had the same wealth created (or credit available to them) over the past few years to allow a large number of families to buy second, third and fourth investment properties to the extent that happened in the U.S..

So as the banks around the world have imploded, the six largest Canadian banks: Royal Bank of Canada ( RY), Bank of Nova Scotia ( BNS), Toronto Dominion Bank ( TD), Bank of Montreal ( BMO), Canadian Imperial Bank of Commerce ( CM), and National Bank of Canada (TSE) -- have looked like stalwarts.

Most are still reporting earnings, have relatively low exposure to U.S. loans, and are in strong capital positions to expand their market positions globally as others wilt.

So, the question is why haven't these banks' stocks done even better over the last few months. The five U.S.-traded Canadian banks have all lost over half their value in the last year. They've certainly done better than Citigroup ( C) and Bank of America ( BAC), but that stock performance is only roughly in line or worse than JPMorgan Chase ( JPM). Shouldn't these stocks be doing appreciably better, if the banks are that much stronger?

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