Europe is working on a banking union, but it should also be giving some thought to a bankruptcy union.

With banks' future ability to lend constrained by the need to build higher capital buffers, capital markets - in particular high-yield bonds - will be needed to fill the gap in financing European companies. But in contrast to the US Chapter 11 process that eases corporate restructurings, Europe has a mishmash of often ineffective national procedures. That is cause for concern.