How would banking in UK change if minimum required capital to open own bank would be £100k instead of €5m?
The minimum required capital matters, but in the opposite direction: the more capital you have, the more likely you can challenge big banks. Because the costs of a new bank look like this:



(http://www2.deloitte.com/content/dam/Deloitte/pt/Documents/financial-services/dttl-fsi-uk-Banking-Disrupted-2014-06.pdf)

You need $15 mn just to keep it alive. Recall that, meanwhile, you are supposed to provide credit, so you'll have to borrow more money for this.

With 150K GBP in capital and fractional reserve rules, a new bank will be wiped out with losses. And it has no impact on the competition in banking, which is already quite tough.