while the service sector includes trade, transportation, digital and professional services, health care, education and public administration. 4 to examine the breadth of activity over a given period of time, we constructed a diffusion index that includes the 22 subcomponents of gdp at basic prices and measures the proportion that are growing. this index has been increasing since the third quarter of 2016. 5 the measures are cpi - median, which is based on the price change located at the 50th percentile ( in terms of the cpi basket weights ) of the distribution of price changes ; cpi - trim, which excludes cpi components whose rates of change in a given month are located in the tails of the distribution of price changes ; and cpi - common, which tracks common price changes across categories in the cpi basket. 8 / 8 bis central bankers'speeches

will take remedial action in case the limits are breached by any financial institution. the canadian framework consists of five stages viz., a “ normal ” stage, an “ early warning ” stage, a “ risk to financial viability or solvency ” stage, a “ future financial stability in serious doubt ” stage and a “ non - viability / insolvency imminent ” stage. each stage is identified by a set of conditions and a number of options for supervisory measures. in india, an early intervention system in the form of a prompt corrective action based on three indicators – capital to risk weighted assets, non performing advances and return on assets, has existed since 2002. threshold values for each of the indicators have been defined along with associated structured and discretionary actions. interconnectedness as a potential source of crisis was recognized in india much before the onset of the crisis and, as a result, in march 2007, rbi limited a bank ’ s inter bank liabilities to twice its net worth. a higher ibl limit of 300 per cent of net worth is allowed for banks whose crar is 11. 25 per cent. further, crisis prevention has been an integral part of regulatory framework in india. more recently, we set up the financial stability unit ( fsu ) within the reserve bank to interalia carry out macroprudential surveillance. since its formation in 2009, the fsu has published four financial stability reports ( fsrs ) on a biannual basis. in the most recent report published in december 2011, we introduced the financial stability indicator based on a combination of financial market stability, macroeconomic stability and banking stability indicators. we also introduced new tools for risk assessment such as the systemic risk survey and the systemic liquidity indicator in addition to improving the coverage of the network model analysis introduced in the previous fsr. most people are aware of rbi ’ s counter cyclical policies that won us accolades in our management of the crisis. however, we have also taken several measures to address systemic risk arising out of interconnectedness amongst financial institutions such as placing prudential limits on call borrowing and lending, limits on banks cross holdings of bank ’ s ownership, limits on exposure to single and group borrowers, etc. the further use and development of a macro - prudential policy toolkit to manage systemic risk is actively being pursued within the bank. bis central bankers ’ speeches concluding remarks recent experiences have clearly demonstrated that resolving a financial crisis is complex and costly. this