Mr Varley made the comments during an appearance in a court in New York, where lawyers on behalf of Lehman Brothers have launched legal action against Barclays.
The latter is accused of hiding details during the acquisition of the ailing financial institution, which allowed it to make a âwindfallâ of $11 billion, prosecutors have claimed.
However, Barclays has denied the allegations, claiming that it is still owed funds by trustees of Lehman Brothers estate following the September 2008 takeover.
Mr Varley described the week of the takeover as âthe riskiestâ of his life and said that although the value of assets owned by Lehman Brothers was marked down, the negotiation on price was undertaken to protect Barclays own investors.
He was quoted by Reuters as saying: âWe needed to be able to establish to the board and to regulators that there was a buffer between the value of trading assets and trading liabilities.â
The bankruptcy of Lehman Brothers during the height of the global credit crisis is thought to have been the most severe in corporate history.
By Jim Ottewill