Focusing on effectiveness of incentive and restraint mechanism for performance-duty behavior of banking industry association, this paper studies the reputation incentive from members of banking industry association and regulatory deterrence from government authorities based on systematic analysis of inter-subject relationship under the same framework. By building incomplete information multi-dynamic game, we get the refined Bayesian quasi segregation equilibrium strategic conditions of the game, analyze and discuss the impact mechanism of reputation incentive and regulatory deterrence by simulation analysis using Matlab. The results are as follows:the main indicators of reputation incentive include prior reputation, unit reputation incentive, market identification capability and forward yield discount; the main indicators of regulatory deterrence include investigation ability and regulatory penalties, which can impel or restrict the behaviors of banking industry association effectively. Good reputation can promote the formation of self-discipline, but the fixed service term of the head of association will weaken reputation incentive efficiency; regulatory deterrence can promote reputation incentive on the premise that build a smooth and effective information mechanism. Considering the results and the realities, we give suggestions on improving the construction of internal control mechanism of banking association, strengthening the construction of banking information exchange mechanism and enhancing the supervision of government departments moderately.