There are signs that Australia’s appetite for banking talent isn’t quite what it was.

According to the latest Olivier Internet Job Index, banking and finance was one of the slowest growing sectors in the past 12 months, dropping 1.45% in January.

Is the sky falling in on the banking recruitment market? Bob Olivier, the report’s author, and director at Olivier Recruitment Group, says he’s not convinced: “We’re putting it down to interest rate rises which are squeezing jobs, particularly in the retail area and the non-banking financial institutions.”

Sally Kincaid, head of HR for Citi Markets and Banking, agrees, and says the prelude to February’s bonus season is traditionally quiet. “However we are still hiring at the same levels and volumes as last year, especially for all our front-office areas and graduates.”

Recruiter Adam Kolokotsas, general manager of Tanner Menzies’ Sydney office, holds a different view, and says candidates are sitting tight because they’re afraid of the ‘last one in, first one out’ rule.

“The reality is that domestically the banks haven’t been hurt so much by the credit crunch, but the volatility of the market is pushing [candidates] into a ‘wait and see’ approach over coming months.”

As a result, Kolokotsas says many of his banking clients have taken the view that all the best i-banking talent is locked down for 2008.

“It might well be that 2008 will be a year of caution exercised around recruitment. And this is where the role of a headhunter comes in. If we can dislodge high-class candidates, there will always be a spot for them at competitor organisations.”