So serious that the firm has named its top mortgage trader to help manage the $1.6 billion bailout of one fund,  Bloomberg News reports. The bailout is down from the originally announced $3.2 billion, thanks to asset sales.

Thomas Marano, Bear’s global head of mortgages and asset-backed securities, was given the task of helping  the High Graded Structured Credit Strategies Fund, Bloomberg said, citing a person with knowledge of the decision.  Bear has decided not rescue the second fund. The funds ran in trouble by heavily investing in securities backed by subprime mortgages.

The circumstances compelled the firm to issue a statement to the London Stock Exchange saying  that its private equity affiliate that is traded on the exchange "is not invested in these hedge funds.’’

"Bear Stearns’ franchise is sound," the statement goes on to say. "Since its founding in 1923, Bear Stearns has weathered many market ups and downs, the current situation included."