Self-Regulation of Banking Industry in China, Russia, US and EU: The Factors of Success

The active and stable development of the banking sector of any country is the most important factor in the stability and success of the financial market of both an individual state and the world market. Due to the importance of the banking sector, its regulation is carried out mainly by state regulators, however, the role of self-regulatory organizations, whose main task is to supervise the ethical behavior of participants, cannot be underestimated. The purpose of this work is to identify the factors affecting the successful functioning of SROs, as well as to determine the role of banking SROs in regulating the Chinese banking industry. The result of the study is the confirmation of the theory that was put forward in the paper that the success of an SRO is determined by the presence of three necessary mechanisms in it, that are the establishment of code of conduct, that will clearly identify what refers to ethical and unethical behavior; mechanism of control that will supervise the compliance with the established norms and prevent unethical behavior; and mechanism of punishment, that will motivate workers and institutions to refrain from violating the norms of behavior. The study also determines that, despite a fairly high level of state involvement in all the processes taking place in the country, a banking SRO in China possesses all the features and functions of an SRO, determines the standards of behavior of bank employees, supervises compliance with these standards and applies penalties in cases of their violations, in contrast to the EU countries, for example, in which the activities of bank SROs were suspended, and the full regulation of this sector of the financial market passed into the hands of state regulators. Key words: banking industry, financial market, regulation, self-regulation, SROs in China.