The Globe and Mail reports in its Monday edition that Canadian banks are set to report this week with the group trading at a record high. Guest columnist Amber Kanwar writes this is quite a feat considering the biggest housing markets in Canada are in a bear market. But the banks aren't one-trick ponies. Capital markets and wealth management should be bright spots with the markets near record highs and the war in Iran creating volatility. Exposure to the United States will also be a boon, notes Canaccord's Matthew Lee. Not all banks are set up to take advantage of this. BMO, TD and RBC are all positioned well for these tailwinds, Mr. Lee says. At the same time, the war in the Middle East could present problems to banks with international exposure. "In our view, an elongated Middle Eastern conflict will disproportionately impact poorer, fuel-importing countries, driving inflationary pressure and halting investment," Mr. Lee wrote. Scotiabank's Chilean operations and National Bank's Cambodian operations could face credit and loan growth headwinds. The elephant in the room is valuations. Canadian bank stocks now trade at a premium to U.S. peers, which rarely happens, and are at the highest levels in 23 years.