(Bloomberg) -- The European Central Bank should start reducing its €5.1 trillion ($4.9 trillion) portfolio in 2023, according to Bundesbank President Joachim Nagel.

“The size of the balance sheet is too large and shrinking the balance sheet is more or less complementary to what we have to do on the interest rate side,” he told Bloomberg Television on Friday in Washington. “We should discuss this internally and then maybe begin to reduce the balance sheet next year.”

ECB policy makers have signaled that no such move toward so-called quantitative tightening would take place until rates become be neither restrictive nor accommodative, though Nagel declined to comment where he sees the neutral rate and how far borrowing costs may rise.

“We are just at the beginning of the normalization process,” Nagel said. “It is important to tighten monetary policy, to have normalization of monetary policy.”

The German central bank chief, who is among the more hawkish members of the Governing Council, has repeatedly called for more interest-rate hikes. The ECB has already raised borrowing costs by 125 basis points this year and is expected to raise rates by another three-quarters of a point on Oct. 27.

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