Change at the SEC

THE Securities and Exchange Commission is in transition. Its chairman will resign soon, and another of the five commissioners will leave within a year. The agency also is without an enforcement chief. The crew change at the agency that oversees America's securities markets comes at a time when those markets are themselves roiled. Despite the ongoing bull stock market, Wall Street has not wholly shaken off its jitters from the Black Monday crash of October 1987. The market for high-yield ``junk'' bonds is starting to look shaky. Nonetheless, the restructuring of corporate America through takeovers and leveraged buy-outs goes on apace; the Rockies of corporate debt mount, with unforeseeable consequences for investors. Concerns about insider trading and other financial crimes persist. And the globalization of the financial marketplace poses competitive challenges to the US markets.

Thus it's a time for alert and savvy leadership at the SEC.

President Bush has tapped White House aide Richard Breeden to succeed David Ruder as chairman. It seems a good choice. Though young (39), Mr. Breeden has experience as a banking and securities lawyer and knows Washington's ways. Under then-Vice-President Bush in the mid-'80s, Breeden headed a task force on financial regulation. This year he has been the president's point man on the savings-and-loan crisis and the Alaska oil spill.

Breeden has been tagged as a pragmatist who tilts toward further deregulation of the markets. Sounds fine; it will all depend on how those strains in his thinking blend in practice. Contrary to the noises made by some members of Congress, there should be no rush into heavy-handed, stultifying regulation of the financial markets. At the same time, we admit to having been spooked by Black Monday and the S&L mess, and would look warily upon any ideology-driven push toward reckless deregulation.

The new securities regulator will face two major tasks - that is, beyond his primary responsibilities, which are to protect investors and the integrity of the financial markets. First, to keep America's markets competitive in what has become a globe-encircling, 24-hour bazaar for capital. Second, to achieve better coordination among the different players in the US's fragmented securites, commodities, and banking regulatory systems. He also should move quickly to appoint an enforcement chief who will sustain the hard-nosed-cop tradition carried on most recently by Gary Lynch.

We wish Mr. Breeden well.