Chapter 3:
When should the government intevene in the economy?

When you feel your stomach rumbling and making sounds like a monster, you know that you're starving. You look in your wallet to see what good food you can get, but no cash! How devastating, so the nearest ATM belongs to another bank (your bank account is not associated with this company). You put your card into the card slot thingy and withdraw $40 and BAM! you see that you have been charged a service fee of $1.50.

Should ATM Fees Be Regulated By The Government?

People often complain why we have to pay a fee to have access to our own money. However, the government has not considered taking action upon this issue because many people are willing to pay an extra fee for convenience sake. This fee has not stirred up a major problem because people are choosing taking a short trip to an ATM and paying a small fee over taking a longer trip to the bank in which your account is associated with.
However a loonie here, and a toonie there, these fees will add up. Its not a big favour to ask of to reduce or take away these silly fees because in Canada, banks are already regulated to reduce foreign competition. The reason of this results in few bank companies and fewer ATM's, making the service charge higher.
If fees are reguylated by lowering it and/or taking it away, it will cause the number of ATM's around Canada to be even lower. On the brighter side, banks are already heavily regulated and it won't hurt to regulate some fees to help the comsumer out.

Relativity:

Usually when the government intevenes with something, the cause has to be great enough to benefit the good of the citizens or that if it is not dealt with, it will greatly harm the ecnomic status of the economy.

When and Why should the government step into fees that are being charged for using the ATM?
ATM's are a public good and it greatly helps the economy by encouraging people to spend more by having more cash on them. Everyone can use an ATM if they have a bank account with money in it. However, government is not regulated these service fees because banks are owned by private sectors and are already heavily regulated by the federal government. If the government should regulate these fees, it is because tey want to stabilize the economy. When they want to expand, government will hike up interest rates/service fees to encourage saving and discourage investments. When the economy is going through recession, goverment will lower interest rates to discourage saving and encourage investment, which is the Keynes Theory. Investments are where governments make the most profits due to taxes.

http://economics.about.com/od/governmentregulation/a/bank_fees.htm

Related post: Stop Paying To Use Your Own Money.
http://financialplan.about.com/cs/banking/a/AvoidATMFees.htm