The banking crisis is a nasty mess throughout most of the U.S. and Europe. Just recently Lloyds Banking Group PLC (NYSE: LYG) ceded 75% of its assets to the government of Britain, and Citigroup Inc. (NYSE: C) closed at $1.05 on Monday. Let's not forget JP Morgan Chase & Company (NYSE: JPM) has $87.7 trillion worth of outstanding OTC contracts as of September 30. JPM will not disclose how much of this is toxic.

However, it seems this is not the case everywhere. In Canada, for example, banks look healthier.

Over the past year, we have been hearing a lot of bad news about investment banks and insurers. The slumping housing market, credit crunch and subprime mortgage troubles have been leading the headlines, so many of you are probably shying away from financial stocks as almost all the banks have been getting only bad publicity lately.

In the light of those worries about safe investments, CNNMoney is asking us to reconsider our opinions, claiming that there really are some quality stocks in these challenging financial times.

Berkshire Hathaway tops the list, mainly because of its CEO Warren Buffett, who has the experience of surviving previous recessions. While some investors may have impression that the company has a lot of tough times ahead, CNNMoney sees Berkshire with a lot of capital, which could be enough to steer it through the current economic storm. To support this argument, CNNMoney cites Keppler Asset management CIO Michael Keppler, who is convinced that Berkshire will be able to beat the difficult market.

"Almost untouched by the subprime scandal and the subsequent credit fallout, Canada's banks are strong and their risk of writeoffs are consider by most analysts as minor," notes Genia Turanova and Gregory Dorsey in Leeb's Income Performance Letter.

Here, they look at two favorites in the Canadian banking sector: Toronto-Dominion Bank (NYSE: TD) and Royal Bank of Canada (NYSE: RY).

"Toronto-Dominion and its subsidiaries, collectively known as TD Bank Financial Group, serve more than 14 million customers. The group offers a full range of financial products and services including wholesale banking securities, personal and business banking, wealth management and U.S. personal and commercial banking.

"TD Bank is looking to expand its US presence by acquiring New Jersey-based Commerce Bancorp. After the acquisition is completed, TD's US banking operations will double. As for the hot topic of all financials these days – its subprime exposure – Commerce Bancorp's $16 billion loan portfolio has no subprime exposure.

MAJOR PAPERS:

• Northrop Grumman Corporation (NYSE: NOC) won a $40B contract to turn Airbus jets into "flying gas stations" for U.S. military aircrafts, the Wall Street Journal reported, breaking The Boeing Company's (NYSE: BA) lock on the market.
• Royal Bank of Canada (NYSE: RY) is expected to launch the first covered bond from the country next week, the Financial Times reported. The bank is targeting a benchmark-sized issue worth $1.4B-$4.2B.
• The Financial Times also reported that Indian conglomerate Tata has concluded an agreement with Virgin Mobile USA Inc (NYSE: VM) to launch a cellular phone brand in India. The brand, called Virgin Mobile in India, would target young Indians under a franchise agreement with Tata Teleservices.

WEB SITES:

• Bloomberg reported that former JP Morgan Chase & Co (NYSE: JPM) Vice Chairman Donald Layton is expected to be named E*Trade Financial Corporation's (NASDAQ: ETFC) new CEO. In an interview, Layton said he may consider a sale of the troubled online brokerage if it "made sense" for shareholders.

MAJOR PAPERS:

• A former Royal Bank of Canada (NYSE: RY) trader alleged that some employees "miss-marked" bonds to increase profits at the New York office's investment banking unit, the Wall Street Journal reported.
• The WSJ also reported that private-equity firm J.C. Flowers & Co is in talks with UK lender Northern Rock, but has not confirmed it will launch a bid for the troubled firm wrapped up in the subprime meltdown.

OTHER PAPERS:

• The New York Times reported Merrill Lynch & Co Inc (NYSE: MER) CEO Stanley O'Neal contacted Wachovia Corporation (NYSE: WB) CEO G. Kennedy Thompson last week to discuss the possibility of a merger between the companies, according to inside sources; Merrill's board has reportedly started considering candidates to replace him.
• The Times also reported that designer Tommy Hilfiger agreed to sell his biggest clothing line exclusively at Macy's Inc (NYSE: M). Under the agreement, Mr. Hilfiger would remove his clothing lines from stores like The Bon-Ton Stores Inc (NASDAQ: BONT) and Dillard's Inc (NYSE: DDS).