what prevented a competing bank from forming and charging slightly lower fees and breaking that monopoly? could it be that a high barrier of laws and regulations ensure that it is too difficult to start a new, experimental, competive bank? (or one which otherwise upsets the entrenched interests who exist close to the State power centers?)

I would wager that it isn't "hard to start a bank" because the service itself is difficult to run, but rather because of laws and regulations that claim to "protect the customer". If I'm right about that, then the laws are clearly achieving the opposite of their goal if a monopoly was able to form and persist without natural competition doing its work.

The aim of entrepreneur in a free market is to come along and find a way to provide the same service cheaper, or a better service for the same price by reducing input costs (thereby drawing away customers from the higher cost product). when that opportunity exists, someone WILL take it, if it's open to them. why wouldn't they?

if, in a free market, productivity doesn't increase / prices don't come down there can only be two reaons why: you found the bottom. OR: someone is coercievly intervening (and the market is no longer free).