In an essay published recently in The Wall Street Journal Continental Bank Corp. chairman Thomas C. Theobald wrote that better banks would result if regulators put less emphasis on capital ratios and more on whether managers are shareholders of their own banks. American Banker's Atlanta bureau chief, Kenneth Cline, asked:

Q Should bank managers be asked to own shares of their banks? What would be the long-term effect on the health of the industry if they did?

* John A. Allison 4th

Chairman and chief executive officer BB&T Financial Corp., Wilson, N.C.

The more that individual managers have of their personal wealth represented by stock ownership, the more they're going to think like shareholders.

We've tried to encourage that in our organization, in two ways. All of our employees have a 401(k) thrift plan that includes a special discount if they purchase company stock, and a lot of people do that. Secondly, we have a stock option program, which we encourage managers to exercise.

I believe as people have accumulated some fairly material stock holdings, they think about shareholders more. But I wouldn't say that totally eliminates the need and concern about capital ratios. In some of the failed institutions, the managers has a lot of stock and also had the tendency to take inordinate risk.

* Thomas L. Ashley

President Association of Bank Holding Companies, Washington

There's no question that it is healthy for bank managers to own stock in the institutions they run. But this decision should be up to the shareholders of the bank, not the government.

Without stock ownership, the tendency is to focus on immediate compensation; with stock ownership, managers are likely to give consideration to longer-range equity interests.

* Richard L. Thomas

Chairman, chief executive officer, and president First Chicago Corp.

Bank managers should be asked -- but not told -- to own shares in their corporation.

All employees should have access to stock purchase programs and be encouraged to own the stock. But more senior managers in particular should be expected to own meaningful equity -- and a generally increasing level over time.

Because personal financial situations differ and change, I am not in favor of mandatory rules.

Long-term ownership at more than nominal levels gives managers an important stake in the creation of shareholder wealth and adds a dimension of commitment to the institution. This in turn should cause managers to think and act with more of an owner's perspective and should add to improved performance.

* John W. Woods

Chairman and chief executive officer AmSouth Bancorp., Birmingham, Ala.

I would strongly support ownership on the part of management - particularly senior management, but really I'd say managers at all levels.

As a publicly held company, what we ought to be doing is representing shareholder interest and try to see that grow. And I think that more management involvement as shareholders really brings management and shareholder interests together.

I realize you can give examples of banks that had problems where there was a lot of stock ownership. But I would also contend that overall, if you look out for the shareholder interest and try to align your thoughts along the lines of what's best for the shareholders, you're going to have an appropriate risk profile.

* Curt Bradbury

Chairman and chief executive officer Worthen Banking Corp., Little Rock, Ark.

In general, I think the concept is good. I happen to own outright - with my own money, not stock options - 72,000 shares of Worthen, or eight-tenths of 1%. It's $1.5 million of my own money, and that's significant to me.

I have always felt that managers' having an investment of their own money in the enterprise they're managing has a tendency to focus on the proper issues. When you evaluate an expenditure of money as if it's your own money, it has a way of focusing the mind.

But different people have different personal circumstances, and in some cases it might not be possible.

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