This year's Government Work Report emphasizes the effective prevention and resolution of risks in key areas, and firmly holds the bottom line of preventing systemic risks from occurring. One of the important tasks is to actively prevent risks in the financial sector and effectively maintain financial security and stability. In recent years, the Central Committee of the Communist Party of China has attached great importance to financial work and financial security, repeatedly emphasizing that preventing and controlling financial risks should be given more prominent and important positions. A series of measures have been taken to deepen financial reform, promote financial development, strengthen financial supervision, and prevent and control financial risks. China's financial security and stability work has achieved significant results, and the financial system, financial markets, and financial institutions operate smoothly. Financial risks are overall controllable, providing important financial strength for macroeconomic regulation, optimizing resource allocation, and promoting economic and social development. However, various contradictions and problems in the financial sector are still prominent, with relatively weak regulatory and governance capabilities, and there are still many risks and hidden dangers. On the one hand, the unprecedented global changes are accelerating, with profound changes occurring in the domestic and international political, economic, and social environment and situation. The risk factors of instability, uncertainty, insecurity, and unpredictability are significantly increasing. The widespread application of modern technology in the financial field has brought significant changes to the operating logic of financial markets, the mechanism of financial risk generation, and the transmission path of financial risks. The causes and forms of financial risks have become more diverse and complex. On the other hand, the market structure, product system, business philosophy, innovation capability, and service level of China's financial industry are not yet adapted to the requirements of various changes. The corporate governance efficiency of some financial institutions is still low, and new and old problems are intertwined and overlapped. The financial risk disposal mechanism is not yet sound, and the construction of the financial legal environment and credit system is still lagging behind. Various financial and non-financial risks, such as real estate market risks, local debt risks, commercial bank asset quality risks, and external shock risks, are intertwined, with increasing complexity, concealment, penetration, and contagion. The task of risk prevention and control remains extremely challenging. In view of this, we must learn from the profound and painful lessons of previous global financial crises, fully recognize the enormous harm of financial crises, always tighten the string of preventing and controlling financial risks in our thinking and concepts, further strengthen financial risk prevention and control, and strive to maintain financial security and stability. We must always adhere to bottom line thinking and problem orientation, always regard preventing and controlling financial risks as the eternal theme and fundamental task of financial work, and strive to win the proactive, routine, and long-term battles of preventing and controlling financial risks. Coordinate financial development and financial security. In the long run, development and security are complementary, dialectically unified, and mutually reinforcing. Security is the prerequisite for development, and development is the guarantee of security. Financial security is an important foundation for sustained and healthy economic development, and financial and even economic development is the greatest financial security. We must adhere to the prevention and control of financial risks in the high-quality development of the economy and finance. We must not only prevent the excessive pursuit of false prosperity in finance from eroding the foundation of financial security, but also prevent the excessive pursuit of financial security (stability) from inhibiting or damaging financial development and weakening the ability of finance to serve the real economy. Efforts should be made to effectively prevent and control financial risks, with a focus on the transformation of localized financial risks into systemic financial risks. For a period of time, due to the limitations of the current regulatory framework and methods, there have been local gaps, conflicts, arbitrage and other issues in financial regulation, resulting in regional and local financial risks from time to time. And these risks often have a high degree of linkage, extensive penetration, and self reinforcing dissemination, which can easily break through market boundaries or regulatory constraints under specific conditions, quickly spread across regions and industries, and trigger broader market fluctuations, ultimately evolving into systemic financial risks and even financial crises. From historical experience, many major financial crises often stem from the neglect or slow handling of local risk signs, and the global financial turmoil triggered by the 2007-2008 US subprime mortgage crisis is a typical case in this regard. Improving and strengthening financial regulation requires significant efforts to enhance regulatory targeting and effectiveness. We need to further improve the regulatory system and rules with Chinese characteristics, continuously expand macro prudential and financial stability functions, and include all financial businesses, activities, and behaviors in regulation to achieve full coverage. We need to strengthen the coordination between macro prudential management and micro prudential supervision. Building on past institutional supervision, we should enhance behavioral and functional supervision, implement continuous and penetrating supervision, and eliminate duplicate supervision, regulatory gaps, and blind spots. To promote the digital transformation of financial regulation, continuously improve financial regulatory data governance, accelerate the construction of financial regulatory big data platforms, develop intelligent risk analysis tools for financial regulation, and improve the standardization and online level of financial regulatory processes. We need to establish a scientific prevention and control system for financial risks, and build a collaborative and linked mechanism for early identification and warning of financial risks, mid-term monitoring and prediction, and later emergency response. Author: He Dexu (Dean and Researcher of the Institute of Finance and Economics Strategy, Chinese Academy of Social Sciences)