A pilot plan to issue city bonds in Wenzhou, Zhejiang province, is being considered as a further step in the city's ongoing financial reform.

The plan was announced by Zhu Congjiu, vice-governor of Zhejiang province, at a press conference on Wednesday, Shanghai Securities News reported.

"The plan to launch a privately-owned bank, securities company and professional insurance company in Wenzhou is awaiting further guidelines from the central government, as private capital needs to be more innovative," Zhu said.

In March, Zhu said at a meeting in Wenzhou that the city bonds could be applied as capital over a wider range, and two securities companies in the province had started research on the issuing of the bonds in Wenzhou.

The city was selected for a pilot financial reform project in March 2012 after a financial crisis arising from widespread loan defaults by many hard-pressed local factory owners and investors.

The crisis prompted the authorities to come up with an overall plan to channel private-sector funds — which were largely deposited in the underground banking system for higher returns — to properly regulate and supervise lending mechanisms.