(Bloomberg) -- A series of gradual interest-rate hikes by the European Central Bank to as high as 2% would help restore normalcy in the currency club’s financial industry after years of ultra-accommodative policy, according to Slovenia’s biggest lender.

ECB policy makers are increasingly embracing a scenario of taking rates above zero before the end of the year. With inflation rising, President Christine Lagarde has said that “normalization” will be gradual once the first hike takes place, perhaps as soon as July.

“There are signals that there would be up to seven hikes, in the range of 25 basis points,” which “would be exactly something that we believe is reasonable,” Blaz Brodnjak, the chief executive officer of Nova Ljubljanska banka d.d., said in an interview. Tightening that would bring the key rate even as high as 2% “would simply bring the banking business back to normal.”

By slowly lifting rates above zero, “the cost of financing would finally be meaningful and properly factored in” by business models, Brodnjak said in Belgrade. NLB became euro-member Slovenia’s biggest lender by assets this year after its emergency takeover of the local unit of Russia’s sanctioned Sberbank PJSC. 

“Moderate hikes would be good, I think hygienic, not only for banks but also for clients,” he said. “Banks don’t feel well in the environment of negative rates.” 

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