I think same way than the loan system in the fiat world: a central autority that will borrow the bitcoins. You can also pay and give back the dollar equivalent of bitcoins, so one could avoid the fall in prices and etc.
What bitcoin brings to the table is a algorithmic check and balance which prevents fractional reserve banking. You can't lend $10 for every $1 deposited. You could lend 5 BTC for every 5 BTC saved and the incentive to do so would be an interest rate commensurate with the risk of the borrower defaulting. If our banking system had run on a one-to-one ratio of depositors to borrowers, and proper credit checks, there wouldn't have been a problem.
There is no reason why fractional reserve banking could not be done with bitcoins. After all, it existed when the U.S. was on the Gold Standard.
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You will need to deliver the bitcoins.And you can't create bitcoins at your own will.
Would be the same as using gold as coin, instead of backing your coins with gold.