Citigroup’s (C) descent to 13-year lows has only contributed to the woes that financial exchange trade funds (ETFs) have seen all year.

The banking giant’s stock is now trading around $5, and it may only be the beginning, reports CNBC. Since most institutional investors and pension funds are prohibited from owning stocks below $5, a selling wave could be triggered sending the share price even lower.

The stock doesn’t have to be sold immediately, but money managers would have to exit before the end of the quarter if it doesn’t recover.

A Saudi prince stepped in and said he would increase his stake in the company from 5% to 4%, but that couldn’t stop the slide.

Citigroup has lost $20.3 billion in the last year, and has taken tens of billions in writedowns on mortgages and assorted other toxic debt. It’s not expected to be profitable in the fourth quarter or in 2009. Shares closed at $4.71 today.

Treasury Secretary Henry Paulson spoke today and cautioned against too-strict regulations in an attempt to avert another crisis down the line. Those statements followed pledges by world leaders at the G20 meeting, which kicked off an overhaul of the world’s financial system, reports Jeannine Aversa for the Associated Press.

Whatever plans are put into place, one thing many will agree upon is that there needs to be way more transparency. Secrecy about things such as where banks are using their bailout funds all the way on down to where investors’ money is invested is not going to be tolerated anymore.

Financial Select Sector SPDR (XLF) is down 63.7% year-to-date. Citigroup is 6.9% of the holdings.

Tags: Financial, Sector ETFs, XLF