Time to get out of Russia?

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While everywhere else has had had all the vivacity of Gordon Brown in Southwold, Russia has been one of the only places where banks have been falling over themselves to hire and retain staff. People on the ground are adamant that the little issue of Georgia won't put a stop to it.

"Under ordinary circumstances, you'd be correct to think that banks might pull back," says Eric Kraus, head of Moscow-based Nikitsky Fund. "But in the current circumstances, things are a little different - banks' old business model is broke and they need to expand into new markets. China and India are largely impenetrable and they're already in Brazil. This leaves Russia, where they're already making a lot of money."

BNP Paribas, Lehman, Credit Suisse and Citigroup have all been building up in Russia this year. Deutsche has been hiring to stand still as its staff have been poached by local rivals.

Russia's allure is clear. The local IPO market may be moribund, but derivatives trading has more than doubled in the past year and M&A activity has increased tenfold since 2002.

Georgia has released a spot of drizzle on this parade. The Wall Street Journal predicts bond issuance will fall as borrowing costs become prohibitive. Coupled with dubious goings on concerning the likes of Hermitage Investment Management, it doesn't look great.

Recruiters say there's been no impact on hiring yet - nor on bankers' enthusiasm for working in Moscow. "The search for talent in Russia is relentless and continuing," says Taru Oksman-Ison at search firm Principal Search. "The credit crunch has had more of an impact than the Georgian situation."

Unless local profits are threatened, this is unlikely to change. Kraus points out that financiers aren't best known for their ideological orientation: "Basically, we're in this to make money."