John Varley, the chief executive of Barclays, said President Obama's measures to prevent banks from engaging in high risk trading activities are 'completely irrelevant' to the British bank and would not hit its profits.

Speaking before the House of Commons Treasury select committee, Varley was sceptical about the likelihood of Obama's proposed measures heading off a banking crisis in future, saying the initiative, spearheaded by former Federal Reserve boss Paul Volcker, would not, by itself, 'lead to a safer system' and was not 'a silver bullet'.

Obama outlined proposals last month that would limit deposit-taking banks' activities, barring them from trading on their own account in the markets, or operating like hedge funds or making private equity investments.

Varley maintained that the bank had not used depositors' money to finance the activities of Barclays Capital (BarCap), the group's investment banking arm.

The Barclays boss had kinder words for the Financial Services Authority's proposal that banks deemed 'too big to fail' should create recovery and resolution plans, colloquially known as 'living wills', that lay out how operations should be resolved in an orderly fashion in the event of a bank getting into trouble.

Varley revealed that Barclays had been one of the guinea pigs for the Financial Services Authority's proposals, which have been designed to ensure that tax-payers are not required in future to bail out banks so as to prevent a collapse of the financial system.

He did take issue, however, with the concept of being 'too big to fail', saying that the size of the bank is less important than the amount of risk taken on.

'The system would not be served by making big banks smaller but making big banks safer,' Varley said.

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