"In Australia we do not draw a distinction between regulation aimed at ensuring the solvency of individual institutions and regulation aimed at minimizing systemic risk," David Gruen, executive director of the macroeconomic group at Treasury, said yesterday.Gruen told delegates at the CEDA State of the Nation 2014 forum that: "Regulators should not take an excessively narrow focus and ignore systemic risk when regulating financial institutions and infrastructure. "All of Australia's financial regulators are required to consider systemic risk in their day-to-day activities."Australia's regulators, he said, "have 'instrument independence' - that is, the freedom to exercise their supervisory responsibilities in a way they see fit but with the intent of delivering on the Government's goal of an efficient and stable financial system best able to support growth. "This independence, and explicit government support for this independence, is critical to ensuring the effectiveness of our financial regulators." He said it was equally important that such independence was balanced by effective accountability."That is why the Government has issued a statement of expectations to each regulatory agency, to make clear what their objectives should be and what they will be held accountable for. That is, the regulators do not have goal independence - that is the responsibility of the Government and Parliament."