Reputation doesn't work in problems with a lot of money/power at stake. You can easily hack the system behaving like a good citizen for a long time until you consume all your reputation in a big transaction. Not only that, reputation is a hard problem if you are a newcomer.
That's why many people say "Everything is an exit scam in waiting". Even your legitimate meatspace bank will cheat if it thinks the economics make sense.
You could use transparency to tell how much a given escrow agent is holding and don't use them if it approaches the value of their reputation. And/or use a system where they don't hold the funds, they merely choose to unlock a transaction to pay to A or B.
Nothing works if the payoff for defection outweighs the costs of enforcement, that's why we have wars, crime, and all of the other things that the old fashion legal and diplomatic systems of the nations of the world have to deal with. However, conflicts of this type are rare compared to the very standard ones that are quite capable of being handled by reputation systems, escrow, etc. They solve these ordinary problems more efficiently, quickly, and at a lower cost.
That should be embraced and noted, and where appropriate migrated to, not pushed aside because there is a rapidly decreasing class of problems not suited to resolution with this model.
You don't make loans to people unless you have evidence that they can and will pay it back. BTCJam for example has reputation scores, and people actually say what they intend to use the money for.
The default rate on BTCJam, which was one of the first loan services is 10%, this doesn't compare well with mainstream rates however, Bitlendingclub is supposedly one third of that, which compares favourably to mainstream rates https://fred.stlouisfed.org/series/DRCLACBS
