As the U.S. prepares to sell more than $2 trillion in debt this year, the Federal Reserve Bank of New York is holding talks with several firms which would help underwrite government debt instruments for sale in auctions, according to a report.

The New York Fed could add up to four Primary Dealers, the firms which underwrite the auctions of bonds.

The firms include MF Global Ltd and Nomura Securities International inc, the report states. RBC Capital Markets and Jeffries & Co. are also in negotiations, people familiar with the process told Bloomberg.

MF Global senior vice president Donald Galante said it was in talks with the Fed, Bloomberg reported. A spokesman for Nomura said the firm had applied to become a dealer with the Fed. Officials at Jeffries, RBC and the New York Fed declined to comment, according to the report.

The Treasury will likely borrow up to $2.5 trillion in the fiscal year ending Sept 30, according to Goldman Sachs, the report noted. The funds will be used to pay for government programs and initiatives, including the likely move by Congress and President Barack Obama to sign into law a $789 billion economic stimulus package to boost jobs and cut taxes.

The Fed's network of Primary Dealers shrank to 16 recently with the bankruptcy of Lehman Brothers; the acquisition of Bear Stearns by JP Morgan Chase & Co; and Merrill Lynch's acquisition by Bank of America.