Mohamed El-Erian: Deutsche Bank not a 'Lehman moment,' but still a big risk

El-Erian on Deutsche Bank: Not a Lehman moment

Allianz's chief economic advisor, Mohamed El-Erian, told CNBC on Friday that Deutsche Bank's recent volatility is not necessarily a "Lehman moment," but should serve as a warning to investors about the danger of dilution.

The former CEO of Pimco told "Fast Money: Halftime Report" that the German lender's challenges are just more headwinds to growth in Europe, and could create contagion risk that reverberates throughout global markets.

Deutsche Bank shares that trade in the U.S. were up about 15 percent at midday Friday, after hitting record lows Thursday.

The stock's value has been cut in half this year, and in recent weeks experienced accelerated losses relating to concerns over reports of hedge fund selling and a possible $14 billion U.S. Department of Justice penalty that could be imposed to settle a number of investigations related to mortgage securities.

Though El-Erian was firm on the United States' financial system and economy remaining strong, he had yet another lesson to be learned from Deutsche Bank, this time for stateside investors.

"The only question for investors in the U.S. stock market is the extent to which we depend on continuous liquidity in central banks," El-Erian said, warning that "you've got to be more tactical than strategic these days" when it comes to investing, especially in European markets.

"The strategic structural picture is really clouded because we have distorted so much in the economic and financial system," he said. This echoed El-Erian's views on the Federal Reserve's reluctance to raise interest rates, and the increased risk of financial instability that kind of stagnation poses.

El-Erian told CNBC's "Squawk Box" on Thursday that low growth should be a warning sign for the world's governments and banks alike, saying governments need to be proactive about stating fiscal policy to avoid potential recession and market instability.