Global Finance magazine's August 25 survey of the world's safest banks pegs The Royal Bank of Canada, or RBC, as the world's tenth safest financial institution. Five other Canadian banks managed to fall in the Top 50.

The world's safest bank -- according to Global Finance –is KfW of Germany.

Global Finance is a professional publication celebrating its 22nd year. Last week, the magazine published its 18th annual survey of the world's safest banks. The rankings were selected through a comparison of the long-term credit ratings and total assets of the 500 largest banks in the world. Ratings from S&P, Moody's and Fitch were used to determine the survey.

The Canadian government, which continues to restrict foreign majority shareholder ownership of Canadian financial institutions, has long been viewed as a pariah in the banking industry as it prohibited cross-border mergers and acquisitions. Some banks, like Citigroup and Bank of America, among others, went on aggressive buying sprees over the last decade and were among the hardest hit in the financial crisis.

But Canada's banks remained Canadian in the 2000s, avoiding cross-border deals and, instead, focusing on domestic, U.S. and Latin American expansion. RBC is Canada's biggest bank measured by assets and posted a strong 2nd quarter. Other Canadian banks also logged a good quarter.

Despite a tough 2008 marked by credit losses and rising loan loss reserves, not a single Canadian bank cut its dividend over the last 24 months.

The Canadian banking system also serves as a model for global regulatory reform at the G-10 and G-20 summits since 2008; by largely avoiding mortgage securitization and other asset-backed structured products most Canadian banks, except CIBC, largely escaped the wrath of the credit crisis. In Canada, a bank typically requires a 25% deposit from mortgage applicants; in the United States, banks and Wall Street bundled heavy amounts of mortgage-backed securities to help fuel the mortgage and housing boom – mostly through poor oversight or none at all.

As a result, more investors and depositors are looking to park money in senior Canadian bank debt, bank stocks or by opening a new personal or business account at Canadian institutions. This is especially the case for Americans – many concerned about the future of their domestic banking system.

But buyers beware: Canada might be perceived as a "safe haven" now but some banks might be adversely affected by rising losses on U.S. commercial real estate loans. Also, one bank is heavily exposed to the Latin American growth cycle, which remains volatile.

The safest way to own a piece of the Canadian banking sector is via senior bank debt. The bank stocks have already gone through the roof and should be avoided; I'd also wait before placing new funds into senior Canadian bank bonds and the Canadian dollar as both assets have already logged big gains since March. A correction would offer a better entry point for long-term investors.