Chapter 5, on “Prudential Supervision under the CRD IV”, presents the principles of prudential supervision as set out in that legislative act (such as the competence and duties of home and host Member States’ NCAs, the supervisory powers, and the powers to impose sanctions); the supervisory review processes (including the internal capital adequacy assessment process (ICAAP), the internal liquidity adequacy assessment process (ILAAP) and the supervisory review and evaluation process (SREP)); the detailed rules governing supervisory measures and powers; the specific corporate governance rules for credit institutions (governance arrangements, ‘fit and proper’ criteria, and assessment for management body members and remuneration policies); and the consolidated supervision of credit institutions, FHCs, MFHCs, and mixed-activity holding companies. As in Chapter 2 , the amendments introduced by the CRD VI in 2024, including the new rules earmarked to ESG risks, which will apply from January 2026, are also duly taken into account.