NEW YORK (Reuters) – The European Central Bank should start shrinking its balance sheet once its interest rate is close to 2%, first by getting banks to repay their loans and then by whittling down its bond holdings, ECB policymaker Francois Villeroy de Galhau said on Tuesday. Trying to fight runaway prices, the ECB has raised its rate on bank deposits to 0.75%, promised more hikes and begun a debate about mopping up excess liquidity from the banking system – legacy of its fight against deflation in the last decade. Villeroy said it was too early to say whether the ECB should raise that rate b…