Of course, we’ve got to get through the mess at hand first. And it looks like we’ve got a way to go yet on that point. CB Online editor Samson Okalow suggests keeping an eye on upcoming settlement dates on credit default swaps on Lehman Brothers debt, an excellent idea.

These swaps are basically default insurance, and there is a major chunk of change to be paid out on the $125 billion in Lehman debt that went down with that good ship (up to 90 cents on the dollar apprently).

That’s a mighty bit of cash set to shift from institution to institution on October 23rd, a major settlement date for these contracts.

But let’s take a moment to learn a lesson here. As we are all now well aware, the credit derivatives market developed over the last decade as an opaque, non-transparent, over-the-counter market, where no one has a clue who is counter-party to who on what terms and why.

Warren Buffett has long warned of the danger of this, as have many others. But as Buffett put it on the Charlie Rose show last night, the economy is a patient in cardiac arrest prostrate on the floor of the hospital. And part of the reason the we’re now tempting economic brain damage was the collective decision to let this derivatives market develop in such an opaque manner.

A good idea floating around in these days of “regulatory rethink” is that credit derivatives should be traded on an exchange and in a more transparent manner so that we know where the landmines are. It’s a basic idea, and had we implemented this earlier we might not be in the dismal state we’re in.  So let’s not pass up the chance to learn a lesson here: A key idea going forward is that a little transparency is a good thing. It avoids credit market heart attacks such as the one now threatening to take down western finance.

All of which is leading to speculation that the Canadian banks could be getting ready to swoop in and buy up some ailing U.S. financial institutions at bargain prices. “I think they’re in a position to really pick over the carcasses,” a portfolio manager with Toronto-based mutual-fund firm CI Investments, Eric Bushell, is reported to have said at a Morningstar Canada investment conference held in Toronto on June 11, 2008.

In other words, as agued in this Canadian Business Online article, the global financial crisis may actually end up benefiting the Canadian banks. They could emerge as bigger and more global players. “Canadian banks are going to be in the driver’s seat for the next decade,” said Dennis Gartman, editor of The Gartman Letter, at the same conference.

Nevertheless, the financial crisis has weighted on the share prices of the Big Five chartered banks in Canada during the past year – most of all CIBC (-48%), followed by Bank of Montreal (-42%), Royal Bank (-28%), TD Bank (-23%) and Bank of Nova Scotia (-13%). CIBC was worse hit because of its exposure to credit derivatives and monoline insurers.

The Bank of Montreal, Royal, and TD are down in large part because their U.S. subsidiaries expose them to U.S. loan defaults. The Bank of Nova Scotia is getting off lightly because it has pursued expansion into overseas markets instead of the U.S. Of the five, I suspect (without having done a great deal of digging) that Royal Bank shares could be the most likely to benefit from the growth opportunities in the U.S market. It has long been the biggest of the Canadian banks and its existing U.S. operations are not as exposed to U.S. loan defaults as the other Canadian banks with a U.S. presence.