In examining prudence of collateral, the argument is how a regulator figures out whether commercial banks want to hold excess liquidity for the precautionary aim or expect to cross the redline before debt overhang. Risky behavior in the fixed investment scale (Holmstrom and Tirole, 2013) is representable as inside liquidity in the market. This paper introduces a credit rationing model in uncertainty where the demand deposit-required reserves argument comes from. We also conduct a stylistic analysis of excess liquidity in Jordan and Lebanon from 1993 to 2015. As such, the proposed model exemplifies the combination of credit, liquidity and regulation.