For at least four decades, the University of California has been the international gold standard in public higher education. The system's 10 campuses are magnets for top-notch faculty members and students. With an annual budget of $18-billion, the university includes five medical centers and three national laboratories. And one of every 10 members of the prestigious Association of American Universities is a UC campus. But the university has had a rough few years. Mark G. Yudof, who was expected to be named last week as the system's new president, inherits an institution that faces shrinking state-budget contributions, the lingering sting of a far-reaching compensation scandal, and the growing belief that it is run by an overwhelmed, bloated bureaucracy. The consensus in California and beyond is that if anyone can fix the system's problems, it may well be Mr. Yudof, whom colleagues describe as bold and savvy. That skill will come in handy in the country's most populous state, where many people feel that the university system is suffering an identity crisis. The university's Board of Regents is wrestling with the redistribution of power among itself, the 1,700-employee president's office, and the campuses. How Mr. Yudof balances the competing interests will be key to his success.