This paper is a SWOT analysis of the United States banking and financial system. The paper shall analyze the strengths, weaknesses, opportunities and threats. To assist in the analysis, the paper shall take a look at some aspects in the financial and banking system in America. To begin with, the paper shall look at the financial innovations that have taken place in the American banking system, the weaknesses that are present in the safety net provisions as revealed in the 2008-2009 financial crises.

Strengths
Some of the strengths of the banking system include
Cost advantages
Economies of scale
Brand names
Strong management
Technology
Unique products

The United States is at an advantage first because of it is able to enjoy large economies of scale. This means that due to the fact that its banking sector is very huge. The large number of banks and other key players in the sector ensure that benefits associated with economies of scale are enjoyed. First off is the increase in competition which ensures that the financial and banking sector is able to offer top of the range products to its clients. The economies of scale also ensure that the United States has a better bargaining power in the global scene. When the banking and financial system in the united states compares to that in other countries around the world, both developed and developing it has a greater bargaining power due to the availability of economies of scale.

The other advantage that the United States banking and financial system is the existence of banks that are brand names all over the world. This by extension means that the United States banking sector has presence in other countries apart from the United States alone. The huge presence worldwide is a huge advantage to the banking sector in the United States because it is a source of not only foreign exchange but revenue in terms of gross national income. Most of the big reputable banks in foreign countries have their headquarters in the United States. The reputation of some of the American banking and financial institutions is an advantage as it gives the sector credibility (Gup, 2011).

The technological advancement in the United States financial and banking system is also something to note. The united states was one of the countries to advance technologically, as such it has been on the forefront of innovation even in the banking and financial sector. Innovation is a key factor as far as banking and the financial sector is concerned. Some of the technological advancements that began in countries like the United States include the automated teller machines, the swift transfers, mobile and internet banking. These are innovations that have diversified the banking sector and made the processes involved in banking to be simpler and manageable (Carmichael & Pomerleano, 2002). 

The other strength in the United States banking system is their currency. The dollar is one of the strongest currencies in the world. As a matter of fact after the gold system, most currencies in the world were pegged to the dollar. Today most international transactions are done using the dollar. The dollar rate is also used by many countries to measure inflation. The significance of the dollar in world trade cannot be over emphasized. Most countries keep reserves in terms of dollars in their central banks. This kind of status quo has enabled the United States to be a very powerful country even when trading with other countries.

Weaknesses
The weaknesses that are present in the financial and banking sector in the United States include
High levels of debt burden
Nonproductive sectors

The high level of debt in the United States economy is a huge weakness. Debts imply that the financial and banking sector has to make smart decisions. Any poor decision-making could lead to bankruptcy. As a result, the people are forced to pay very high interest on loans and also taxpayers are expected to chip in. High debt levels in some instances can reduce the productivity of the sector. This is because the sector is in the business of continually servicing debts. A huge contribution to the high debt levels was the financial crisis that occurred in the years 2008 and 2009. The collapse of the United States financial sector was an indication that things weren’t so good in terms of debt management (Gup, 2011).

The other weaknesses are the non-productive sectors in the economy. Such sector includes the commercial estate sector. Investment in such sectors has a huge impact on the economy of the country. People continue to invest in the commercial estate sector yet the sector is not as productive as it is anticipated to be. This leads to lack of good returns on investments which in the end translate to low levels of productivity in the financial sector and the economy at large.

Opportunities
There are several opportunities present in the financial and banking sector in the United States. Some of those opportunities include:
New markets
New technology
New services
New products
Improved monetary and fiscal policies
International expansion

Opportunities in the banking and financial system always present themselves in the form of new ways of doing things. An example is the provision of new products in the banking and financial sector that are user-friendly and are beneficial to the end user. This would imply identifying the needs of the clients and other key industry players and providing products that are relevant. Provision of new services and adoption of new technology falls in the same category. The banking system should be a system that is volatile and can easily adapt to changes that are beneficial in the long run. If a banking sector is very rigid, it may be difficult for it to be at par with other banking systems (Gup, 2011).

Another opportunity is to ensure that the financial and banking sector have favorable monetary and fiscal policies to operate in. Favorable policies should ensure productivity and an increase in the country’s gross domestic product. The United States should, therefore, concentrate on making adjustments to its fiscal and monetary policies so that they are favorable to the industry players (Carmichael & Pomerleano, 2002). 

Threats
Some of the threats that the financial and banking sector face include
Competition
Bad economy
Political risk
Government regulations

When the economy in a country is not favorable, it affects the financial and banking sector. The American economy has not been doing so well and is in fact just recovering from the financial crisis. Due to this, the economy is still not at its best, and that is a huge threat to the operations and productivity of the financial and banking sector (Gup, 2011).

Another threat is government regulations. When government regulations are not favorable, it means that the sector operates under circumstances that do not promote maximum productivity and efficiency. The government may set regulations on the interest rates among other issues that affect the banking and financial sector. It is, therefore, important for the government to enact regulations that are favorable to the operations of the banking and financial sector. There should be a balance and a consensus between the goals of the government and what is favorable for the sector. The financial and banking sector is the cornerstone of any economy and as such, all measures should be taken to ensure that it operates at maximums efficiency and productivity.