Im a bit worried about bank shares. There seems to be a bit of optimism about. It might be misplaced. Let me explain this view, which could be wrong. You can never say anything for certain in Crazyland. Logic does not rule supreme here.

But about banks. Well, there is a feeling that the worst is over. How could it be otherwise? They did so badly around October time that the worst must be over. Well maybe it is. Maybe share values of banks still lamentably low are stabilised.

But will they rise now? Or more excitingly will they rise fast? A few folk feel they should. If only for old times sake. Did (A074130.KQ - news) not the Royal Bank once trade at £12 and more? Did they not fall to 10p?

They are now about 40p. A 400% rise in a few months. Surely the action is not over. Is £1 a share out of the question in a month or so? Well, yes, sadly I think it is.

When the credit crunch hit the UK more than a lot of other countries, some foreign banks lost interest in Britain. This left the UK banks holding the baby. They still continue to lend, but not enough to beleaguered businesses. But really they should not be lending much at all.

They still cant afford to loan out huge amounts. They still need cash themselves. Ive read somewhere that banks are still lending out more than they should. They have a vested interest in keeping firms in business when theyve already loaned money to them. If a business goes belly up owing a bank, the money is lost. But if the lending company can be kept going until the recession eases up, then they will get their money back.

But it could take years before the effects of the slump are cancelled out. And in the meantime, banks might not do so well. And so the share prices will not necessarily rocket. I hope Im wrong, because I still hold plenty of banks shares. But my worries are worth airing, at least. Rock on.