Speaking to the House of Lords' EU financial affairs sub-committee, McFarlane said Barclays was likely to hire hundreds of staff for its EU operations, but that a trade deal with the EU would mean fewer jobs losses.
"In a trade agreement scenario where the activities were permitted from the EU into London and vice versa, the impact would be relatively modest," he said.
"Beyond that, it would be very significant both in terms of economic activity, tax revenue collection and a bigger effect on the infrastructure, the ecosystem...they are very, very significant and there's a very significant loss of tax revenue associated with that."
McFarlane said the number of job losses would be "insignificant" if the UK agrees a trade deal with the EU, but that this was not the most important consideration.
"They're not the most important thing," he said. "We may have to re-paper hundreds of thousands of contracts into the EU...which I think is a more significant impact. Because we already have people on the ground, it is not as significant as the financial numbers or the capital implications, and in fact it's relatively modest."
The EU Commission's Brexit negotiator Michel Barnier has said that City firms will lose their passporting rights after Brexit, but there could be scope for mutual recognition in some areas.
However, any co-operation between the EU and the UK would have to take place on a "level playing field", he said.