``Institutional building will take much larger time than recognised in the Tarapore committee report,'' Williamson said while delivering a special guest lecture here last night as part of a three-day derivatives conference.

``CAC cannot be a course for the next few years (in India),'' he said delivering the lecture titled ``Whither financial liberalisation?''

The visiting World Bank official said though CAC was a major element in causing devastation in the East Asian countries, the advantages of CAC are greater.

``You cannot measure benefits from CAC,'' he said and expressed himself in favour of the reforms recommended by the Tarapore committee.

Williamson, however, was of the opinion thatthe Tarapore committee failed to deal with one major condition for CAC, which is attaining ``a core membership of the Organisation of Economic Cooperation and Development''.

Williamson admitted that evidence pointed to financial liberalisation leading to banking crisis and observed that, ``while there is a bigger risk, how big depends on the financial order.''

``In a country which respects rule of law, risks are contained,'' he said, suggesting that in such a country, advantages of liberalisation are in the form of more efficient investment allocation which outweighs risks.

Liberalisation needs much more than just opening up, he said, adding, ``if liberalisation is to work, institutional building is a must.''

Part of the problem in East Asian countries was poor regulation of the banking system and over-leveraging by banks to the private sector, he said.

``India, China, Bangladesh and Taiwan were unaffected by the East Asian contagion because of strong regulation, supervision and transparency,'' hefelt.

India had not allowed short-term money to come in and prevented domestic money from going out, he noted.

Referring to the financial sector reforms in India, he said he would love to see the statutory liquidity ratio reduced along with that of government's fiscal deficit.