Pimco's Gross: Regional Banks Not Too Big to Fail
Bill Gross, chief investment officer at top bond fund Pimco, told CNBC Thursday that U.S. regional banks are at a disadvantage to their larger rivals because investors and regulators don't see them as too big to fail.
Regional banks are less diversified than larger banks, Gross said, adding that they also lack the same access to capital that larger banks have. (See the CNBC interview in the video below.)
Earlier Thursday, Gross told Reuters that he still holds corporate debt of some of the largest banks slammed by the global credit crisis, including Citigroup , because of their long-term value.
Even as bank shares come under severe pressure as the companies slash dividends and undertake dilutive capital-raising, bondholders of the major financial companies expect to benefit tremendously as the increased equity capital and lower dividend payouts improve the companies' credit quality.
Gross said in an interview that he continues to hold the ''high-quality'' debt of banking companies because they represent good long-term value.
Gross said that, in addition to Citigroup, he remains a holder of the debt of Morgan Stanley , Goldman Sachs , Deutsche Bank , and Spain's Banco Santander.
- Reuters contributed to this report.