Barclays Chief Executive John Varley defends curbs on 'proprietary trading'

The 'Voicker Rule' as put forward by Federal Reserve Chairman, Paul Voicker is unlikely to stop 'banks too big to fail' says Varley, speaking before a Treasury Select Committee.

Speaking to MP's, Varley expressed gratitude to the taxpayers who supported the financial industry whilst also pointing out that his bank are effectively acting as 'guinea pigs' for the new system which the Treasury has set out, ensuring banks have 'living wills' in case they collapse.

"This initiative [Volcker] on its own will not lead to a safer system," Varley said.

He added that the rule is only to ensure that a banks profits from its investment arm does not use savers money from its high street banking - something which Barclays doesn't do.

"It is inconsequential. It is completely irrelevant [to Barclays]." he said.

"The system would not be served by making big banks smaller but making big banks safer," said Varley. "Size is irrelevant".

Varley also made mention of tougher times for consumers as banks would be forced to increase the 'cost of credit' to ensure they have 'living wills' and more liquid assets such as government bonds.

Such effects would include lower rates for savers and higher rates for borrowers.

"The cost of credit is going in one direction only – it's going higher," said Varley.