Inflation linked opportunities hot (but not that hot)

With the threat of inflation rising, Citigroup has hired a team of inflation derivative specialists from ABN Amro. Recruiters say most banks are hiring opportunistically in the area

"Inflation-linked products have been hot for the past 18 months," says the head of one derivatives-specialist search firm. "Most banks are now in the business to varying degrees, but are still eager to grow."

Citigroup's move apparently follows the departure of most its previous inflation-linked team to rivals during the course of 2005. Royal Bank of Scotland, JPMorgan, HSBC and BNP Paribas are also understood to have built inflation-linked teams over the past 18 months.

"From now on, it's a question of adding rather than starting out," says the search consultant. As teams become more established, he says banks are increasingly looking for prior inflation-related experience, although an interest rate or commodities background is also a possibility.