Why can't Google or Facebook be a Bank?

[Christopher]

* * Now I am not looking for opinions here * *
I don't care that you might not like Facebook, or that you might not like Google...replace them with companies you do like that are big.

Both Google and Facebook - along with many other companies - are trading on the stock market looking to use your money to run their business. So why can't they become their own bank, and directly receive cash that they can use to run their business while those that invested money can get some interest back on it?
Is there something stopping them from getting money that way? If so, where can I find that. Also provide as much detail as possible, Thanks.

[Christin K]

Google and FAcebook are SELLING STOCK on the market--not trading. You're confusing the terms.
They can't be banks because they aren't entities that can receive donations or deposits, are not subject to federal banking regulations and their businesses are not BANKING. It's just a simple matter of what they do and why they do it. They're public corporations, not banks.

Before they were public corporations they did exactly what you describe--but that's not banking. That's using investor's money to build their business. However, investors aren't depositors--and when you invest in any company you have no guarantees that you will get any money back.

Nothing stops a company of any size from seeking investors or backers--but that doesn't make them banks.

[Common Sense]

Google and Facebook are no longer selling stock on the market. It's unlikely Google will again.... and it's going to be years before Facebook does so (again). So I don't quite understand your point.

In fact 99.999998 % of the stocks that trade on the market, $0.00 go to the actual companies whose stock is traded. Stocks sold in the stock market are between current owners and soon to be owners of stock.

Yes.... there are IPO's (initial public offerings).... and rarely there are secondary offerings. An IPO is done once. A secondary is hardly done at all.

So in short.... your premise is 99.99998% wrong.... so there is no answer to the question. The premise of the question is wrong.

[john]

As usual, these posters don't even understand the question. You want to know why some big company like Google doesn't become a bank so they have the same easy access to cheap capital that banks have instead of being forced to access much more expensive capital through equity, debt, and money markets, yes? The answer is essentially that the these companies would have to convert into bank holding companies to do that (a bank holding company is a company that owns a bank and other companies). The Bank Holding Company Act of 1956 forbids bank holding companies from being involved in a non-financial business. Thus, if Google wanted to become a bank holding company, they would need approval from the Fed. The Fed would say "Uh, you are adequately capitalized to be a bank holding company but you have to discontinue all non-financial operations". Presumably that would not be Google's plan.

Note that this is not the rules elsewhere in the world. In Japan, Google could also be a bank for instance.