The need for tighter regulation of the loss-plagued, scandal-ridden savings and loan industry should be beyond dispute.

The case was certainly clinched this week with the report from a congressional watchdog committee that fraud and misconduct touch one of every four savings and loan institutions and play a part in more than three-quarters of all S&L failures.Unfortunately, the House Government Operations subcommittee - which monitors the federal agencies that regulate the nation's financial institutions - is better at diagnosing the problem than prescribing the cure.

Among its suggested reforms, the subcommittee is calling for hiring more examiners and FBI agents, increasing their salaries and training, and requiring routine disclosure of all enforcement actions to deter future abuses.

But the problem with the S&Ls involves not only greed but also bad judgment in making excessively risky loans.

Moreover, though two-thirds of the thrift industry is still healthy, the problem is still so massive that it's hard to see how a federal bailout can be avoided.

Just how massive can be seen from the fact that the S&L industry lost $7.8 billion in 1987 and is expected to lose another $11 billion this year. Though the Federal Savings and Loan Insurance Corp. guarantees deposits of up to $100,000, it doesn't have enough money to pay off all potential claims. This situation creates the potential for a ruinous run on the S&Ls, which provide half of the financing for new homes.

Estimates of the cost of a federal bailout range from $20 billion to $100 billion. But before Washington rides to the rescue, private capital should be tapped. Sen. William Proxmire, chairman of the Senate Banking Committee, estimates that the healthy part of the thrift industry could afford to put up $30 billion.

Even then, there's still no substitute for tougher regulation. So how about merging some of the weaker S&Ls with stronger thrifts or banks? How about setting higher capital requirements for thrifts that opt for riskier investments? Then how about lowering the insurance premiums that maintain larger capital buffers?

Moreover, how about getting tougher with greed and fraud in the S&L industry? A thief who steals a $10,000 car can expect to spend two years in jail. Shouldn't a thief who drains federal deposit insurance of $1 billion expect to spend not just years but decades behind bars?