Recital 28

(28)In the banking sector, Article 133(5) Regulation (EU) No 575/2013 of the European Parliament and of the Council ⁹ allows credit institutions, under certain conditions and subject to prior supervisory approval, to apply a preferential risk weight to equity exposures acquired under specific legislative programmes. Those programmes should provide significant subsidies or guarantees, involve government oversight and impose some restrictions on the types of equity investments. To foster a cross-sectoral level playing field and to strengthen the contribution of insurance and reinsurance undertakings to equity financing of the real economy, it is appropriate to replicate the approach in the standard formula for calculating the Solvency Capital Requirements under Delegated Regulation (EU) 2015/35. Equity investments made under comparable legislative programmes, including those which support one or more economic sectors listed in the Communication on the Competitiveness Compass for the Union or in the ReArm Europe plan/Readiness 2030 ¹⁰ , should be recognised as having the potential to reduce risk and may therefore justify a lower capital requirement, subject to the approval of the supervisory authority.