Abstract: In Western nations, financial capital is the principal entity governing capitalist production relations and the credit system. The credit system promotes capital concentration and the advancement of large-scale socialized production. Simultaneously, the deprivation accumulation of financial capital is magnified and intensified within the credit system, resulting in the dilemma of economic stagnation, 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 society to sink deeper and deeper into the snare of mutually reinforcing industrial contraction and escalating debts. The increasingly desperate struggle within the trap 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: consolidating the leading position of state-owned financial institutions in financial operations on the foundation of an economic system dominated by public ownership, with the goals of serving the development of the real economy and common prosperity, avoiding having the logic of deprivation accumulation governing financial operations, reinforcing the value orientation centered on the people, and strengthening the centralized and unified leadership of the Communist Party of China over financial work.