The Greek debt bailout is similar to the subprime crisis in the US and likely will send global investors looking for safety, Pimco's Mohamed El-Erian told CNBC.
While Greece's request to the International Monetary Fundthat the bailout plan be activated helped calm world markets for the moment, El-Erian, CEO of the world's largest bond fund, said the true ramifications have yet to be felt.
"How long will it take markets to worry more about contagion risk?" he asked during an interview hours after an upward revision of Greek's deficit and a credit downgrade sent shockwaves through the European Union.
Figuring out how to coordinate the financial rescue operation will be among the most difficult challenges, he said.
The "concentric circles" of the conflicting interests in the Greek bailout will determine market reaction.
He said the situation will be much "like subprime" in the US in how the collapse in lending to risky borrowers caused chaos throughout the interconnected financial system.
"Safe havens, they get impacted positively. Banks get impacted negatively," El-Erian said. "This is going to play out not in one go. This is both a liquidity and sovereignty issue. It is complex."
US Treasurys could get a boost from the Greek rescue—though they were lower in price Friday—while European investors who are overexposed to the troubled nation will need to adjust their portfolios.
"It's not about Greece, it's about the shock to the public finances that has occurred as the result of the crisis," El-Erian said. "It's a more general phenomenon that we're going to be dealing with for the rest of the year."