Abstract: The Third Plenary Session of the 20th Central Committee of the Communist Party of China stated that we must ensure both development and security. Preventing systemic financial risks is an important prerequisite for safeguarding the economic security and social stability of China. In Western nations, financial capital is the main body that governs capitalist production relations and the credit. The credit system promotes capital concentration and the advancement of large-scale socialized production. Simultaneously, the accumulation by dispossession of financial capital is magnified and intensified in the credit, resulting in the predicament of industrial contraction, escalating debts, and their mutual reinforcement. The attempts by financial capital to extricate itself from this predicament with the aid of national credit have further exacerbated the situation, causing Western societies to plunge deeper and deeper into the snare of mutually reinforcing industrial contraction and escalating debts. The increasingly desperate struggle in the snare compels Western financial capitalism to take a radical and violent course, which will lead financial capitalism to its downfall. The collapse of financial capitalism represents the genuine systemic risk in Western societies. The practical approach for China to guard against systemic financial risks lies in the following respects: strengthening the centralized and unified leadership of the Communist Party of China over financial work, reinforcing the people-centered value orientation, consolidating the leading position of state-owned financial institutions in financial operations on the foundation of the economic system dominated by public ownership, with the goals of serving the development of the real economy and common prosperity, and avoiding the logic of accumulation by dispossession governing financial operations.