LONDON, OCT. 26 -- For a birthday party, it didn't seem very happy. Called by London's International Stock Exchange to celebrate the first anniversary of the "Big Bang" -- the October 1986 deregulation of the financial market here -- the affair happened to coincide with the market's big bust.

The news conference that began today's festivities was planned a month ago, when last week's crash was a largely ignored glimmer in the eyes of a few gloom-and-doomthe eyes of a few gloom-and-doomers.

But by the time a glum-looking group of exchange officials appeared before a roomful of reporters this morning, London indexes already were adding to last week's losses by dropping an additional 100 points in the first four minutes of trading.

The officials were the upper echelon of the exchange, the directors of domestic and international markets, settlements and technology.

Their leader, ISE Chairman Nicholas Goodison, began by acknowledging a "wish that market conditions were somewhat better on this first anniversary of the changes made in London. It shows," he said, "that you can't do everything by stage management."

As the market here has plunged ever deeper, the spotlight of local blame has fallen on the Big Bang.

Once hailed as the signal of Britain's entry into the world of big time finance, the changes wrought by the bang now are seen by some as the reason, if not for the rapid market fall, then at least for London's inability to save itself from the slide.

Big Bang opened London for worldwide trading. Foreign banks, once prohibited from owning more than 30 percent of British brokerage firms, were allowed 100 percent equity, and many of the big U.S. and Japanese houses moved in.

The number of firms now making markets here has tripled, to 35, in the year since deregulation.

Britain's major banks got into the act, as Big Bang reforms allowed them for the first time to become full-service financial institutions.

The banning of fixed trading commissions and elimination of the distinction between brokers and jobbers all contributed to expand the market here in leaps and bounds.

What captured the attention of most laymen, and the British media, however, was the transformation of the sleepy London exchange, where prices were quoted and deals were made face to face, into a high-powered world of computers and telephone transactions.

One illustration of public unease since the crash began is the widespread belief that it was caused in part by computers somehow taking on lives of their own -- making deals and quoting prices according to software programs that humans no longer controlled.

All of this, Goodison said today, is nonsense. It wasn't the computers, which are merely bulletin boards for the price information humans punch into them. Nor was it the vastly increased volume of trading in London over the past year.

"The cause of the fall has not been the markets," he said, picking up a theme that has been played at length by the British government over the past week. "It has been the decisions taken, or not taken, by world governments, particularly the United States of America. ... My view, and the European view, is that something needs to be done with the {U.S.} fiscal deficit.

"One of the sad things about the present scene," Goodison said wistfully, "is that the U.K. is an outstanding country at the moment economically."

After a plea that questions on the crash be postponed until after he and his colleagues made their anniversary presentation, Goodison proceeded to list the gains Big Bang had made. Among them, he listed increased liquidity, the ability to handle large transactions.

He said transactions "are up at least double in all markets, and competition has enormously increased," and dealing costs are lower for most customers, especially large institutions.

The market, he said, "is more visible, with all domestic equities being published within five minutes."

Perhaps most important, Goodison said in remarks expanded in a series of television interviews today the changes have brought about a major new financial services industry in Britain, which now provides more than 5 percent of all the nation's jobs and raises investment money for industry in "fabulous amounts" for many more.

London, he said, has been "firmly established as the dominant market in the European zone. Our aim is to make it a major market for equity just as it has been in Eurobonds."

There has been, Goodison acknowledged, a downside. The quadrupling of business that followed Big Bang simply bowled over a number of dealers, and major settlement backlogs have developed.

Last week's collapse, when nearly 2 million shares changed hands every minute, simply exacerbated the problem.

Not every institution has made it through the year's inevitable shakeout, and a significant percentage of the thousands of new young financial wizards hired to handle the surge have been pruned into unemployment.

But far from demonstrating the faults of the post-Big Bang exchange, Goodison said, "the events of the last week have demonstrated how well the system has held up." The computers didn't crash, the exchange did not close, and no one jumped out of a window.