What is the primary concern with excessive credit creation in an economy?

Excessive credit creation in an economy significantly raises concerns primarily because it can lead to asset bubbles and inflation. When credit is too readily available, individuals and businesses may borrow excessively, which can drive demand for assets like real estate or stocks beyond sustainable levels. This heightened demand can inflate prices, creating bubbles that may eventually burst when the market corrects itself, leading to financial instability.

Moreover, the influx of credit can result in inflation as more money chases the same amount of goods and services. When inflation rises, the purchasing power of money declines, affecting economic stability. Thus, the relationship between excessive credit creation, asset prices, and overall inflation is critical in understanding the potential risks to an economy.

In this context, the other options do not accurately capture the primary concern associated with excessive credit expansion. For instance, while it might impact savings rates, influence interest rates, or affect loan availability, these are secondary outcomes rather than the direct and immediate risks of creating too much credit in an economy.