[ By Larry Goldfarb ] UBS's quarterly earnings announcement on Wednesday should raise the focus and scrutiny of the Compliance and Risk management.  Why should that be, if UBS exceeded Wall Street revenue expectations, and the firm has been moving toward a more sustainable wealth management model?  Well, how about the fact that overall earnings are down 54%, and investment banking pretax profit fell 24%, which, in our opinion, might lead UBS management to look for ways to (aggressively) pare back its reach, that in turn could prompt some in the business units to take subtle, though potentially problematic and desperate, risks to generate more profits. Investment Bank Performance and Profitability. The importance of the investment bank to UBS transcends profitability.  Wealth management markets products to its customers which contributes to the attractiveness of the firm.  Wealth management has the potential to generate significant profits from the sale of investment banking products, and raise the bank’s reputation through successful trades or deals. The investment bank has had significant of turnover in both business and support personnel.  Some of this turnover notably contributed to the European rogue trading incident in September.  It's an implicit obligation of Compliance to anticipate potential issues and then rise to the occasion to safeguard the reputation of the firm and ultimately its franchise.  The key here is elevated supervision. While surveillance and analysis can go part of the way, management lead its troops by example, by ensuring that policies and procedures are adhered to and that undue risks are avoided wherever possible. [WSJournal, 5/2/12]