FRANKFURT (Reuters) - Germany's Allianz, one of Europe's biggest financial firms and investors, warned on Thursday about high public debt levels and the risk of sovereign bonds.

Chief executive Oliver Baete said public debt levels were "really scary", and called out the United States by name.

"Investment in sovereign risk, particularly domestic, is seen to be risk-free. Nothing could be more wrong than that. It's not risk-free", Baete told journalists.

He was asked about recent market volatility and how Allianz was positioning itself.

(Reporting by Tom Sims and Alexander Huebner, editing by Thomas Seythal)