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Japan has been hit by the magnitude-9 earthquake -- the world's largest in the past six years. Disasters like this are called catastrophes as they badly damage social and economic conditions in the affected country (or several countries as after the 2004 Indian Ocean earthquake near the northern part of Indonesia's Sumatra Island). Moreover, such disasters are commonly considered rare and occasional. Because human beings have not yet learnt to accurately predict the timing and location of natural disasters, the forecasting is based on probability parameters that are quite insufficient. However, some experts argue that the frequency of natural disasters has been increasingly high: just in the past 100 years the world saw around twenty earthquakes that caused multi-billion damage and killed thousands of people. However, if we speak about a specific region, for instance, Japan, the recent earthquake is comparable to the calamity that the country experienced in 1923.

The central bank`s decision to increase the interest rates was not a surprise: it started toughening monetary policy last December by raising the interest rate it pays on deposits. From that time the problem of consumer price surging have been becoming increasingly acute. A high inflation level (9.7-10% per annum) prompts monetary authorities to take further steps. In the wake of the recently taken measures - raising reserve requirements and deposit interest rates -- the latest increase of all central bank-controlled interest rates appears quite logical. The indicative refinancing rate will be 8% (up by 0.25) from the beginning of March, the minimum interest rate on overnight repos is 5.25%, and reserve requirement have been increased to 3.5-4.5%. The deposit interest rate does not depend on the term and is set at 3%. Although raised, all interest rates remain negative in real terms. Russia is in the group of economies that are tightening their monetary policy - BRIC, Turkey and Israel.

British bank Barclays announced its intention to sell its Russian-based Barclays Bank. The company is not the first to close its business in Russia (Barclays Capital, however, is said to continue operation): the crisis prompted other foreign credit institutions to quit the market. Morgan Stanley and Santander consumer finance, for instance, closed their Russian subsidiaries last year

The Bank of Russia is forced to tame prices in a difficult economic situation.

First, in 2010 the inflation rate appeared higher than forecasted by the government because of the rise in consumer and service prices. Forecasts for this year have not been revised yet (6 to 7% per annum) but in the first month of 2011 prices grew 2.4% (see the table).

From the beginning of 2011 the Bank of Russia stopped controlling deposit interest rates after credit institutions saw improvements in their liquidity conditions. Indeed, in 2010 the volume of deposits in Russian banks increased 17% according to our estimates. At the same time, interest rates for borrowed funds have reached a 10-year low (see the figure).

27 January the Federal Law `On Prevention of Illegitimate Use of Inside Information and Market Manipulation` passed last summer came into force. Generally, the Russian and international public opinion supports the ideas laid down in the law. Insiders` benefit shall be considered unfair and unjust by default. Acts aimed at profiting from using inside information must be penalized (in accordance with the administrative or criminal law). More than ninety countries have passed anti-insider laws, and more than forty of them practice punishing market players for insider trading (IT). As if to prove the rightness of the undertaken course, the US Galleon case has been going on for more than a year. Many famous economists (including Eugene Fama and Kenneth French) back up the ban on the unlawful use of inside information, but in our vision this measure is somewhat dubious.

A BP-Rosneft agreement to form a strategic global alliance has shown that under specific circumstances Russia and the West could make rapprochement to ensure long-term sustainable energy security. Indeed, the share swap and setting-up a joint venture can be regarded sharing of risks related to the extraction of hydrocarbon resources from the Arctic shelf. Importantly, the two will not use the product sharing agreement regime that had been recognized not fully fitting Russia's interests. Although the both parties are not guaranteed against overly optimistic estimates of the reserves, in general, coming of an international oil giant puts sort of a quality mark on the area of potential exploration. If investigations prove successful, the alliance members will be able to significantly step up their reserves and if the situation favors them, they could start developing the fields in future. In the event of failure the parties will share expenses with a new experience of working in the Kara Sea extreme conditions being the only reward for their efforts. Russia should not count too much on an opportunity to learn new cutting-edge technology as service companies with deep offshore experience will be most likely invited to carry out works on key sites.