The paper 's objective is to present the process of transformation of the prudential supervision that is taking place along with, among other things, the development of the financial system, the accession of the EU member countries to the Economic and Monetary Union and the preparation for implementation of the new supervision standards under the so-called Basle II. The changes also cover the remaining sectors of the financial system outside the banking, this leading to integration of the entire financial services supervision within the framework of a single supervisory body. In the paper, this process is presented basing on the experience of Germany where, in 2002, the office of financial services supervision (BAFin) was established in a new legal form and endowed with a high degree of independence. It is the on-going integration of financial sectors and markets, the convergence and unification of financial services, the formation of financial conglomerates and the quick technological changes that is considered to be the reason for integration of the supervisory bodies. The merger of the German supervisory bodies has resulted in a reduction in employment and savings in the area of equipment thanks to the synergy effect, especially in the so-called general service administration (computerization). However, it is not this that is considered to be the success factor of the new structure. The main advantages are expected to ensue as a result of the extension of the uniform supervision on similar risks throughout the whole financial system, the gradual disappearance of arbitrage between separate financial market segments, a fuller supervision coverage of innovations that are arising on the junctions of different markets, the improvement in communication among the regulators and, in the course of time, the formation of a new, market-oriented supervision culture. Another effect, not without importance, will be the expected strengthening of Germany's position within the international supervisory bodies. On the other side, there are some possible threats, too. The authors present the details of integration, the regulatory governance, as well as the actual trends in the BAFin 's operation. They draw attention to the existence of complications in the process of integration of prudential supervision institutions, some resulting from strong determinants that stem from the specificity of national financial and legal systems and the state of their development. The most recent trends consist in placing the integrated the prudential institution within the structure of the central bank, as has been the case in Holland and Ireland. There, the powerful position of the central bank has been utilized to strengthen the role of the integrated financial supervision.