With regulators and law makers bogged down in debate on how to deal with the credit crisis and worsening economy, financial stocks have gyrated wildly since the beginning of year.

XLF

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The Financial Select Sector SPDR (XLF), an ETF that tracks the financial sector of the S&P 500 Index, began the year at $12.52 and then promptly fell over 25% to $8.08 by January 20 before recovering to nearly $10 last week.

A banking crisis in the UK and renewed worries over large losses atBank of America‘s Merrill Lynch unit sent XLF to a new low.  On Friday, BofA’s Chief Executive Ken Lewis stated that BofA would not need additional federal funding and still believes its acquisition of brokerage Merrill Lynch & Co. was the right move.

Regional banks have not been spared from the uncertainty over financials.  The SPDR KBW Regional Banking ETF (KRE) declined nearly 30% from the beginning of the year before recovering slightly last week.

The treasury department has said it expects to unveil its latest plan to get credit moving again on Tuesday, February 10.

For more, see the ETF Directory for a complete listing of Industry ETFs.