The problem of a large lender going insolvent or disappearing is no different than with traditional banks and lending. It happens all the time.

You could look at Ripple as a new way to do lending with large organizations. This could be much more convenient with better-than-banking hours; as long as the organization is large enough and trustworthy enough, it could work.

*Or* you could look at Ripple as a way to facilitate lots of small loans between individuals. For smaller person to person loans, it would seem to be much better than using an Internet forum to track debt. Still, I have a hard time believing that a web of trust can make these loans worth the risk.. just look at the Lending forum!

Philosophically, I wonder if lending will ever really make sense without very large entities who are being audited by the government. Banks are all about trust, after all. I know that banks won't steal my money because they have decades of history, boards overseeing activities, etc. And the idea of lending to friends might seem appealing, but I think it's bad for friendships.