The time is right for the European Central Bank (ECB) to start scaling back its ultra-loose monetary policy program and to begin normalizing interest rates, senior executives from two of Europe's leading regional banks told CNBC on Monday.
"Right now consumers are confused, they don't understand negative interest rates, they don't understand a zero interest rate and the system becomes volatile as a result. We shouldn't have that," Wiebe Draijer, chairman at Rabobank, told CNBC on Monday.
When Draijer was asked when would be the appropriate time for the ECB to begin normalizing rates, he replied, "I would have hoped they'd already started."
Leading Central banks pumped money into the economy following the global financial crisis of 2008 and the sovereign debt crisis in the euro zone. A number of institutions such as the European Central Bank and the U.S. Federal Reserve introduced bond-buying programs and cut benchmark rates in an effort to stimulate lending. Several banks also pushed interest rates into negative territory, effectively charging banks who park cash at a central bank.
At the start of June, the ECB increased its economic growth forecast for the euro zone but kept interest rates on hold. While ECB President Mario Draghi hinted there would be no need to cut rates further in the near-term, he also suggested the ECB would continue with its bond-buying stimulus program for a "long time".
"We have been through extraordinary times with negative interest rates. We have not had negative interest rates before and we have had them (now) for a long, long time and that really hurts the banking business so we are looking forward to the normalization of rates." Carlos Torres Vila, chief executive of Spanish bank BBVA, told CNBC on Monday.
On Sunday, the Bank for International Settlements (BIS) urged central banks to press ahead with raising interest rates.
The BIS, an organization commonly known as the central bank of central banks, said it recognized some turbulence in financial markets would need to be managed but urged policymakers to take advantage of an improving global economic outlook.
BBVA's Vila was slightly more cautious in predicting when the ECB should implement an interest rate rise as he stressed Europe's central bank should be careful to avoid creating a sense of panic in financial markets.
"It should be a progressive unwinding… definitely not to spook markets too much but as (the ECB) see's inflation coming back with stronger growth rates then they should progressively start cutting back on their purchases and then raise rates," he concluded.
—CNBC's Spriha Srivastava contributed to this report.