Scenarios for 2035 — a part of the book Basel as an International Financial Centre by Dr Alexander Ressos.
The preceding parts of this book have described how Basel became an international financial centre and what it is today. Part K looks forward. A book about a financial centre that ended with the present would leave its readers with a snapshot, although the decisions that bankers, regulators, investors, clients and their advisers take today will produce their effects over the coming decade. Those who structure a family's wealth, establish a fund, choose the location of a regional headquarters or negotiate a long-term supply contract for a pharmaceutical product must form a view of the world in which these arrangements will operate. Scenarios offer a disciplined way of forming such a view without pretending to know the future. Their purpose is to describe several internally consistent pictures of what could happen, so that decision-makers can test their strategies against each of them and recognise early which of them is beginning to materialise.1
The method used in this part follows the tradition developed at Royal Dutch Shell in the 1970s and refined since then in corporate strategy and public policy. Each chapter first sets out the present baseline briefly, with cross-references to the earlier parts of the book. It then identifies the driving forces that are relatively predictable, such as demographic change or the diffusion of a technology, and separates them from the critical uncertainties whose outcome cannot be known today, such as the course of geopolitical rivalry or the result of a popular vote. Two to four scenarios are then constructed from different combinations of these uncertainties. Each receives a short name, a description of the world in 2035, a list of signposts that would indicate its arrival and an assessment of its implications for Basel's financial centre, its institutions, its clients and their advisers. The scenarios are the author's analytical constructs. They are deliberately pointed, because a scenario that differs only marginally from the present teaches little. No probability is attached to any of them. Speculative elements are marked as such.2
The horizon of 2035 lies about ten years ahead, a period long enough for structural change and short enough for today's institutions and many of today's decision-makers still to be in place. Five domains have been selected because they will decide Basel's position in that year more than any others. Chapter I examines digital money, from the projects of the BIS Innovation Hub to tokenisation and crypto-assets and digital assets. Chapter II turns to the pharmaceutical industry, geopolitics and trade policy, which determine the economic base on which the city's wealth rests. Chapter III asks what will become of the Swiss banking model, including sustainable finance and access to the European market. Chapter IV treats the relationship between Switzerland and the European Union, whose package of agreements will shape the conditions for a border city more than for any other Swiss centre. Chapter V closes the book with artificial intelligence in financial services, including its consequences for the multilingual work that Part J described.
This part belongs to Basel as an International Financial Centre by Dr Alexander Ressos, published here in full, section by section.
Digital Money: BIS Projects, Tokenisation, Crypto-Assets and Digital Assets — conclusion
Digital money is the domain in which Basel's role as an international financial centre is most directly at stake. Read more Basel · Scenarios for 2035Why money is the first scenario
Money is the infrastructure on which every other service of a financial centre rests. Read more Basel · Scenarios for 2035The Swiss legal baseline
Switzerland chose early to adapt its existing private and financial market law to distributed ledger technology. It did not enact a separate code for crypto-assets. Read more Basel · Scenarios for 2035Stablecoins and the Swiss regulatory turn
Stablecoins have tested the Swiss framework more than any other instrument. They are tokens that promise a stable value in relation to a currency, usually the US dollar, and are typically backed by… Read more Basel · Scenarios for 2035The European Union and the United States
Outside Switzerland, two legislative acts have set the terms of the debate. The European Union's Regulation on markets in crypto-assets, known as MiCA, has applied in full since 30 December 2024,… Read more Basel · Scenarios for 2035The digital euro
The digital euro is the most advanced retail central bank digital currency project among the large advanced economies. Read more Basel · Scenarios for 2035Project Helvetia and wholesale central bank money
The Swiss contribution to the debate began in Basel and Zurich. Project Helvetia was the first project of the Swiss centre of the BIS Innovation Hub and was conducted with the SNB and SIX. Read more Basel · Scenarios for 2035SIX Digital Exchange and the market infrastructure
The infrastructure on which Helvetia operates is the SIX Digital Exchange, a subsidiary of SIX Group, which FINMA licensed in September 2021 as a central securities depository and stock exchange… Read more Basel · Scenarios for 2035Tokenisation in Swiss banks and in Basel
Commercial banks in Switzerland have taken different paths towards tokenisation. UBS launched a tokenisation service under the name UBS Tokenize in 2023 and has issued tokenised structured products… Read more Basel · Scenarios for 2035The BIS Innovation Hub: the Swiss centre and its projects
The Swiss centre of the BIS Innovation Hub, located in Basel and Zurich in cooperation with the SNB, has pursued a consistent line since Helvetia. Read more Basel · Scenarios for 2035Dunbar, mBridge and the withdrawal of the BIS
Other centres of the Hub pursued a different question: whether multiple central bank digital currencies could circulate on a common platform for cross-border payments, bypassing the chains of… Read more Basel · Scenarios for 2035Agorá: tokenised correspondent banking
The most ambitious project of the Hub in this field is Project Agorá, whose name is the Greek word for the marketplace of the ancient city. Read more Basel · Scenarios for 2035Supervision and data: Pine, Atlas and Aurora
Not all projects of the Hub concern payments. Project Pine, conducted by the New York centre with the Federal Reserve Bank of New York, developed a toolkit of smart contracts that central banks could… Read more Basel · Scenarios for 2035The unified ledger and the finternet
Besides building prototypes, the BIS has offered a conceptual framework for the future monetary system. Read more Basel · Scenarios for 2035The BIS on stablecoins: three tests
The Annual Economic Report of June 2025 sharpened the BIS's position on stablecoins. Read more Basel · Scenarios for 2035Drivers and critical uncertainties
The present baseline allows the identification of several driving forces that are likely to continue whatever happens. The first is technological maturity. Read more Basel · Scenarios for 2035Scenario one: "Unified ledger"
In this scenario, the vision of the BIS largely prevails. By 2035, the major central banks, including the SNB, the ECB, the Bank of England and the Bank of Japan, have issued tokenised wholesale… Read more Basel · Scenarios for 2035Scenario two: "Stablecoin dollarisation"
In the second scenario, private dollar stablecoins become the dominant instrument for cross-border payments and an important store of value for individuals and companies outside the United States. Read more Basel · Scenarios for 2035Scenario three: "Fragmented rails"
The third scenario assumes that geopolitical rivalry intensifies and that payment systems divide along the lines of political blocs. Read more Basel · Scenarios for 2035Scenario four: "Incremental tokenisation"
The fourth scenario is the least dramatic and, for that reason, deserves to be taken seriously. Read more Basel · Scenarios for 2035Signposts to watch
The four scenarios are not mutually exclusive. Since elements of several can coexist, the world of 2035 is likely to contain features of each. Read more Basel · Scenarios for 2035Legal questions across the scenarios
Whatever scenario materialises, several legal questions will need answers. The first concerns the finality of settlement. Read more Basel · Scenarios for 2035Implications for advisers and clients
For clients, the four scenarios lead to a common practical conclusion. Crypto-assets and digital assets will be part of the wealth of many families in 2035, whether as a major asset class or as a… Read more Basel · Scenarios for 2035Pharma, Geopolitics and Trade Policy — conclusion
The pharmaceutical industry of Basel enters the decade to 2035 in a position of strength and exposure at the same time. Read more Basel · Scenarios for 2035Method and scope of the chapter
Part G of this book described the life sciences industry of Basel as it stands: the groups and their history, their corporate finance, their taxation, their intellectual property and their compliance… Read more Basel · Scenarios for 2035The baseline: an export economy built on medicines
The starting point is the weight of the industry. As Part G, Chapter I showed, chemical and pharmaceutical products account for roughly half of Swiss goods exports, with medicines, active ingredients… Read more Basel · Scenarios for 2035The United States as market, regulator and bargaining partner
The decisive market for the Basel groups is the United States. According to their annual reports, roughly forty to fifty per cent of the pharmaceutical sales of Roche and Novartis are made there, a… Read more Basel · Scenarios for 2035Tariffs on Swiss goods in 2025 and the framework of November 2025
In April 2025 the United States announced so-called reciprocal tariffs on imports from most of its trading partners, with rates calculated by reference to the bilateral trade deficit. Read more Basel · Scenarios for 2035Section 232 and the pharmaceutical proclamation of 2026
The second instrument was the investigation under Section 232 of the Trade Expansion Act of 1962, which authorises the President to restrict imports that threaten to impair national security. Read more Basel · Scenarios for 2035Most-favoured-nation pricing and the company agreements
The third instrument concerned prices. Part G, Chapter IV described the executive order of May 2025 on "most-favoured-nation" pricing, under which the price paid in the United States for a medicine… Read more Basel · Scenarios for 2035The European Union: pharma package and Critical Medicines Act
The European Union remains the second pillar of the Basel groups' business and the immediate economic environment of the Basel region. Read more Basel · Scenarios for 2035China: from generic supplier to source of innovation
For most of the past three decades, China appeared in the strategy of the Basel groups in two roles: as a growing market for medicines and as a supplier of chemical intermediates and active… Read more Basel · Scenarios for 2035The BIOSECURE Act and the contract manufacturers
The most concrete American measure directed at Chinese biotechnology concerns contract research and manufacturing. Read more Basel · Scenarios for 2035Syngenta between Basel, Beijing and Washington
Syngenta occupies a special position in this landscape. As Part G recorded, the company was acquired by ChemChina in 2017 and became part of Syngenta Group, a company incorporated in China and owned… Read more Basel · Scenarios for 2035Supply chains, active ingredients and export controls
The pandemic years made the fragility of pharmaceutical supply chains visible to the general public. Read more Basel · Scenarios for 2035Swiss trade policy: free trade agreements as insurance
Switzerland's answer to the fragmentation of world trade has been to diversify its access to markets through free trade agreements, concluded either bilaterally or within the European Free Trade… Read more Basel · Scenarios for 2035Patents, TRIPS and the price of innovation at home
Intellectual property forms the legal foundation of the business model described in Part G, Chapter IV. Its international protection faces pressure from several directions. Read more Basel · Scenarios for 2035Talent, research and Horizon Europe
The third driver after markets and prices is the availability of talent and of public research. Read more Basel · Scenarios for 2035Drivers and critical uncertainties
The foregoing sections allow the drivers of the coming decade to be summarised. Following the method of scenario planning, the chapter distinguishes between predetermined elements, which can be… Read more Basel · Scenarios for 2035Scenario 1: Atlantic anchor
In the first scenario, which the chapter calls "Atlantic anchor", the bargains struck in 2025 and 2026 harden into a stable framework. Read more Basel · Scenarios for 2035Scenario 2: Hollowing out
The second scenario, "Hollowing out", describes a gradual erosion of Basel's position. Read more Basel · Scenarios for 2035Scenario 3: Bloc builder
The third scenario, "Bloc builder", assumes a deeper geopolitical fragmentation. Relations between the United States and China deteriorate further, perhaps as a result of a crisis in the Taiwan… Read more Basel · Scenarios for 2035Scenario 4: Biotech renaissance
The fourth scenario, "Biotech renaissance", is the most optimistic. It assumes that the trade and pricing disputes of 2025 and 2026 settle into a manageable framework, as in the first scenario, but… Read more Basel · Scenarios for 2035Signposts to watch
The four scenarios can be monitored through a common set of indicators. The first group concerns trade: the American tariff regime for pharmaceuticals under Section 232, the general tariff on Swiss… Read more Basel · Scenarios for 2035Implications for banks, pension funds and the capital market
For the banks of Basel and of Switzerland, the pharmaceutical groups are clients in several capacities. Read more Basel · Scenarios for 2035Implications for the canton
Basel-Stadt bears the largest share of the fiscal risk. Its budget depends heavily on the profit taxes of a few groups and on the incomes of their employees. Read more Basel · Scenarios for 2035Implications for lawyers and advisers
For lawyers, tax advisers and compliance professionals, all four scenarios increase the demand for advice at the intersection of trade, tax, regulation and security. Read more Basel · Scenarios for 2035The Future of the Swiss Banking Model — conclusion
The Swiss banking model of 2035 will be shaped by decisions and developments that are still open in autumn 2026. Read more Basel · Scenarios for 2035Why the banking model needs scenarios
The Swiss banking model has been declared dead several times in the last three decades. Read more Basel · Scenarios for 2035The baseline: one global bank after Credit Suisse
The most visible change in the Swiss banking landscape since 2023 is the disappearance of the second large bank. Read more Basel · Scenarios for 2035The domestic market: cantonal banks, Raiffeisen and PostFinance
The global bank is only one part of Swiss banking. In terms of the number of institutions, employees and branches, the domestic market is dominated by banks whose business lies largely within… Read more Basel · Scenarios for 2035Private banks and the consolidation of wealth management
Wealth management is the business on which the international reputation of Swiss banking rests. Read more Basel · Scenarios for 2035Independent asset managers under FinIA
The growth of independent asset managers is one of the less noticed structural changes in Swiss finance. Read more Basel · Scenarios for 2035Switzerland's share of cross-border wealth
Switzerland remains the largest booking centre for cross-border wealth in the world. Read more Basel · Scenarios for 2035Margins, costs and the compliance burden
The profitability of Swiss wealth management has come under pressure from several sides at once. Read more Basel · Scenarios for 2035Drivers I: UBS, capital and the location question
The first and most consequential uncertainty is the future of UBS in Switzerland. The bank's management has argued repeatedly since 2025 that the capital requirements proposed by the Federal Council… Read more Basel · Scenarios for 2035Drivers II: the franc and the policy of the National Bank
The strength of the Swiss franc is both an asset and a burden for Swiss banks. For wealthy clients, the franc is one of the few currencies that have preserved their purchasing power over long… Read more Basel · Scenarios for 2035Drivers III: market access, digitalisation and artificial intelligence
The access of Swiss banks to the European Union market is a structural weakness of the Swiss financial centre. Read more Basel · Scenarios for 2035Drivers IV: demography and the great wealth transfer
Demography is one of the most predictable drivers of wealth management. In Switzerland and in the European countries from which Swiss banks draw many of their clients, a large share of private wealth… Read more Basel · Scenarios for 2035Drivers V: geopolitics, sanctions and neutrality
Geopolitics has become a direct driver of Swiss banking. When Switzerland adopted the sanctions of the European Union against Russia in February 2022, it departed from its earlier practice of… Read more Basel · Scenarios for 2035The future of sustainable finance
Sustainable finance was promised a place in this Part when Part E, Chapter II and Part F, Chapter V discussed the rules on climate disclosure and greenwashing and the appearance of the Basel name in… Read more Basel · Scenarios for 2035Reputation as a capital asset
Reputation is a driver that cuts across all others. The value of Swiss banking has always rested on the expectation that assets deposited in Switzerland are safe and that Swiss banks keep their… Read more Basel · Scenarios for 2035The Basel specifics
The scenarios must be translated into the particular conditions of Basel. Part E, Chapter I described a financial centre that is smaller than those of Zurich and Geneva and in which banking is less… Read more Basel · Scenarios for 2035Scenario 1: Fortress Switzerland
The first scenario assumes that the political process ends with a capital regime for UBS that is stricter than before 2023 but acceptable to the bank. Read more Basel · Scenarios for 2035Scenario 2: UBS departs
The second scenario assumes that UBS decides, at some point before 2035, to move its group headquarters abroad. Read more Basel · Scenarios for 2035Scenario 3: The Asian pivot
The third scenario focuses on the geography of wealth. It assumes that the growth of private wealth in Asia and the Gulf continues to outpace that in Europe and that clients from these regions prefer… Read more Basel · Scenarios for 2035Scenario 4: Digital reinvention
The fourth scenario places technology at the centre. It assumes that tokenisation of financial instruments, the integration of crypto-assets and digital assets into ordinary portfolios and the use of… Read more Basel · Scenarios for 2035Signposts to watch
The four scenarios are not mutually exclusive. Elements of several of them may combine, so that UBS remains in Switzerland while booking centres shift to Asia and banks digitalise their services. Read more Basel · Scenarios for 2035Implications for Basel
The implications for Basel differ between the scenarios, although some apply to all of them. Read more Basel · Scenarios for 2035Implications for clients and advisers
For clients, the scenarios have practical consequences. A wealthy family that books its assets in Switzerland should consider how its arrangements would be affected if its bank were acquired,… Read more Basel · Scenarios for 2035Switzerland and the European Union — overview and summary
No external relationship shapes the conditions of business in Basel as directly as the relationship between Switzerland and the European Union. Read more Basel · Scenarios for 2035A relationship of treaties
Switzerland is the only one of the European Union's large neighbours whose relationship with the Union rests on a web of sectoral agreements. Read more Basel · Scenarios for 2035From the free trade agreement of 1972 to the vote of 1992
The modern relationship begins with the Free Trade Agreement of 22 July 1972 between Switzerland and the European Economic Community. Read more Basel · Scenarios for 2035The bilateral path: Bilaterals I and II
After 1992 the Federal Council chose to secure market access through sectoral agreements. Read more Basel · Scenarios for 2035Schengen, Dublin and the open border at Basel
For the daily life of Basel, the association with Schengen has mattered as much as any market access agreement. Read more Basel · Scenarios for 2035The guillotine clause and the logic of parallelism
The seven agreements of the Bilaterals I are linked by a provision known as the guillotine clause. Read more Basel · Scenarios for 2035The institutional question and the end of the framework agreement
From 2008 the Union made further market access conditional on the resolution of what it called the institutional questions. Read more Basel · Scenarios for 2035Consequences of 2021: medical devices, Horizon and the stock exchange
The first consequence concerned medical devices. On 26 May 2021, the same day the Federal Council abandoned the framework agreement, the Union's Medical Devices Regulation became applicable. Read more Basel · Scenarios for 2035The package of agreements
After 2021 both sides searched for a new approach. The Federal Council chose a package method, which combined the institutional questions with new agreements and Swiss participation in Union… Read more Basel · Scenarios for 2035Institutional elements: dynamic adoption, the Court of Justice and arbitration
The heart of the package lies in the institutional elements, which apply only to the internal market agreements and do not create a general framework for the whole relationship. Read more Basel · Scenarios for 2035Free movement, safeguards and wage protection
The free movement of persons is the most sensitive substantive area. Switzerland has agreed to adopt the Citizens' Rights Directive, although with exceptions negotiated for its key interests. Read more Basel · Scenarios for 2035Electricity, health and food safety
The electricity agreement would integrate Switzerland into the Union's internal electricity market. Read more Basel · Scenarios for 2035Programmes, cohesion contribution and Erasmus
The package secures Swiss participation in Union programmes. A separate agreement on Union programmes provides for Swiss association with Horizon Europe, the Euratom research and training programme,… Read more Basel · Scenarios for 2035Ratification and the referendum question
The domestic approval of the package has raised a constitutional question that is itself one of the main uncertainties of the coming years. Read more Basel · Scenarios for 2035The "No to 10 million Switzerland" initiative and its aftermath
The free movement of persons was tested again before the package reached the ballot. Read more Basel · Scenarios for 2035Financial services outside the package
For a book on a financial centre, the most striking feature of the package is what it leaves out. Read more Basel · Scenarios for 2035Third-country branches: Article 21c CRD
The sixth Capital Requirements Directive of 2024, which implements the final elements of Basel III in Union law and which Part F, Chapter II has described, introduced a harmonised regime for… Read more Basel · Scenarios for 2035The bilateral alternative: the Berne Financial Services Agreement
Since the Union has offered no comprehensive solution, Switzerland has looked for bilateral arrangements with other partners. Read more Basel · Scenarios for 2035What is at stake for Basel
The interests of Basel in the relationship with the Union can be summarised under five headings. The first is labour. Read more Basel · Scenarios for 2035Drivers and uncertainties
Scenario planning distinguishes between predetermined elements, which can be anticipated with some confidence, and critical uncertainties, whose resolution will shape the future in different… Read more Basel · Scenarios for 2035Scenario 1: "Anchored partnership"
In the first scenario, Parliament approves the package and the Swiss electorate confirms it in a referendum in 2027 or 2028, whatever the majority required. Read more Basel · Scenarios for 2035Scenario 2: "Slow erosion"
In the second scenario, the package is rejected, either in Parliament or in a popular vote. Read more Basel · Scenarios for 2035Scenario 3: "Guillotine"
The third scenario takes the free movement of persons as its point of departure. Despite the rejection of the sustainability initiative in June 2026, population growth and housing pressure lead to a… Read more Basel · Scenarios for 2035Scenario 4: "Variable geometry"
The fourth scenario lies between the others. The package is approved in modified form, or parts of it are separated, so that some agreements enter into force while others are delayed or abandoned. Read more Basel · Scenarios for 2035Signposts to watch
Several indicators will show which scenario is unfolding. The first group concerns the domestic process: the decision of Parliament on the type of referendum, the date of the popular vote and the… Read more Basel · Scenarios for 2035Implications for banks, pharma, frontier workers and advisers
For the banks of Basel, the most important conclusion is that none of the four scenarios brings comprehensive access to the Union market by 2035. Read more Basel · Scenarios for 2035Artificial Intelligence and Financial Services — overview and summary
The last chapter of this book addresses a technology whose effects on finance are still unfolding. Read more Basel · Scenarios for 2035From statistics to generative models
The term artificial intelligence covers a family of techniques whose common feature is that a computer system produces outputs, such as predictions, classifications, recommendations or text, that… Read more Basel · Scenarios for 2035Artificial intelligence in Basel's banks
The banks of Basel range from the branches of UBS through the Basler Kantonalbank and its subsidiary Bank Cler to private banks and the local offices of foreign institutions, as Part E, Chapter I… Read more Basel · Scenarios for 2035Insurers, pension funds and the actuarial tradition
Basel's insurance industry, which Part I described, has a long tradition of quantitative modelling. The actuarial profession was among the first to apply statistics to commercial decisions. Read more Basel · Scenarios for 2035Pharma finance and research: the life sciences connection
The life sciences groups that Part G described are among the largest private investors in artificial intelligence in Switzerland, although their investment serves research and development more than… Read more Basel · Scenarios for 2035The BIS as laboratory and observer
The Bank for International Settlements approaches artificial intelligence from three directions. Read more Basel · Scenarios for 2035FINMA's supervisory expectations
The Swiss Financial Market Supervisory Authority has addressed artificial intelligence without a dedicated statute, using its existing powers over governance, risk management and operational… Read more Basel · Scenarios for 2035The Swiss approach to regulating artificial intelligence
At federal level, Switzerland has chosen a path that differs from the comprehensive regulation adopted by the European Union. Read more Basel · Scenarios for 2035The EU AI Act and its reach into Basel
The European Union adopted Regulation (EU) 2024/1689, generally known as the AI Act, in June 2024. The regulation entered into force on 1 August 2024 and applies in stages. Read more Basel · Scenarios for 2035Data protection, professional secrecy and the cloud
Artificial intelligence depends on data. Much of the data held by Basel's financial institutions is protected by law. Read more Basel · Scenarios for 2035Language machines: translation and Swiss German
Part J showed that Basel is a multilingual city in which Standard German, Baseldytsch, French and English meet every day. Read more Basel · Scenarios for 2035Artificial intelligence in legal advice
The legal profession, whose members advise Basel's banks, insurers, pharmaceutical groups and private clients, has been affected by generative models more directly than most professions. Read more Basel · Scenarios for 2035Risks: models, bias, herding and fraud
The risks of artificial intelligence in financial services fall into several categories that supervisors and the literature have identified. Model risk is the oldest. Read more Basel · Scenarios for 2035Labour markets in the back office
Because the effect of artificial intelligence on employment is uncertain, estimates vary widely. Read more Basel · Scenarios for 2035Drivers and uncertainties
Several drivers will shape the role of artificial intelligence in Basel's financial centre over the coming decade. Read more Basel · Scenarios for 2035Scenario 1: The augmented centre
In the first scenario, artificial intelligence raises the productivity of Basel's financial institutions steadily without disrupting them. Read more Basel · Scenarios for 2035Scenario 2: Automated compliance
In the second scenario, the greatest change occurs in compliance and supervision. By 2035, the monitoring of transactions, the onboarding of clients and the screening against sanctions lists are… Read more Basel · Scenarios for 2035Scenario 3: AI concentration
In the third scenario, the market for artificial intelligence becomes highly concentrated. Read more Basel · Scenarios for 2035Scenario 4: Trust shock
In the fourth scenario, a major failure linked to artificial intelligence undermines public trust. Read more Basel · Scenarios for 2035Signposts to watch
Several signposts will show which of these scenarios is becoming more likely. On the regulatory side, observers should watch the Federal Council's consultation draft on the implementation of the… Read more Basel · Scenarios for 2035Implications for institutions, clients and advisers
For financial institutions in Basel, the scenarios suggest several robust strategies. Read more Basel · Scenarios for 2035Epilogue: Basel and its long view
This book began at the Rhine knee, where the river turns north and where Celtic settlers, Roman soldiers and medieval merchants found a place to cross, to trade and to collect tolls. Read more