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Reuters reported on Thursday that Canada's banking system is considered to be the world's soundest, based on the latest Global Competitiveness report from the World Economic Forum.

Countries around the world were ranked on a scale of 1 (banks are essentially insolvent and need government bailouts) to 7 (everything is A-okay). Canada placed first, with a score of 6.8, followed closely by Sweden, Luxembourg, Australia and Denmark.

By comparison, the U.K. ranked 44th, United States ranked 40th and Germany ranked 39th.

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However, before you rush into Canadian bank stocks, keep in mind that the scores were based on the opinions of executives - and let's face it, they have been known to overstate the health of their banks in recent months. Indeed, although the United States was low in the rankings, it still generated a score of 6. That is, U.S. banks might rank low on a relative scale, but executives, nonetheless, think things are dandy in the sector.

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