* Financial sector down 8.5 percent in afternoon trade

* Observers see rescue taking time; need for more detail (Adds money manager, crisis background; updates shares)

By Jonathan Spicer

NEW YORK, Feb 10 (Reuters) - Bank stocks sank deeper on Tuesday, with those hardest hit in the credit crunch leading the fall, after the U.S. Treasury unveiled a rescue plan that analysts said was light on details and would take time to achieve its goals.

Regions Financial (RF.N: Quote, Profile, Research), KeyCorp (KEY.N: Quote, Profile, Research), Fifth Third Bancorp (FITB.O: Quote, Profile, Research) and Bank of America Corp (BAC.N: Quote, Profile, Research) were among the biggest percentage decliners on the S&P Financial index , which tumbled 10 percent in afternoon trading.

Meanwhile, Bank of New York Mellon Corp (BK.N: Quote, Profile, Research) and Hudson City Bancorp (HCBK.O: Quote, Profile, Research) slid 6.3 percent and 5.4 percent respectively, making them among the best performers in the sector, after the government said it would remove $500 billion in spoiled assets from banks' books.

Banks opened weaker but dropped sharply after the U.S. rescue plan was announced at 11 a.m. EST. (1600 GMT) See: [ID:nN102559]

"The reaction is just to sell because no one has got any more clarity, and I think people were expecting more clarity at this point," said Keith Davis, bank analyst at Farr, Miller & Washington in Washington, D.C.

"I continue to believe that the banks that are most exposed are those that hold huge portfolios of consumer loans for which they're under-reserved," he said.