“Goldman Sachs Group Inc. is lobbying regulators to exempt investment vehicles known as credit funds from the “Volcker rule” in a bid to preserve the firm’s lucrative merchant-banking unit.

But if Goldman fails, it has a backup plan.

Some executives at the New York company believe they have found a way to extricate the credit funds from proposed limits on how much can be invested in hedge funds and private-equity funds, according to people briefed on the efforts.”

“It’s the biggest trench warfare that’s happened in this town maybe ever,” says Dennis Kelleher, president of Better Markets, a nonprofit group funded by an Atlanta investor. It seeks to represent the public’s voice in Dodd-Frank’s implementation and has met with regulators.”

Read John Carreyrou’s full article here