Borrowers default risk is one of the most relevant types of risk in commercial banking and its
assessment is important to secure business profitability and avoid huge losses during economic turbulences. This
leads to necessity to investigate topics related to assessment of borrowers’ default probability and applicability of
factors, which would enable to capture the newest trends of borrowers’ markets. Leading economic indicators (in
addition to financial and other economic indicators) are often suggested as forward-looking in scientific
literature. However, there is still a discussion going on applicability of financial ratios and economic indicators.
As the problem is relevant in theoretical view as well as for practitioners, this article aims to identify
applicability of leading economic indicators for the estimation of default probability. Further, the qualitative
criteria for factor selection were identified and used when using detailing, grouping and SWOT analysis
methods. Based on current scientific literature analysis, this paper concludes that although leading economic
indicators are able to capture forward-looking signals, they should be used with careful analysis of its drawbacks
and in combination with financial factors in order to avoid overshooting effects. The limitation of the article is
the analysis of factors based on rather theoretical analysis than estimation of quantitative criteria. This suggests
that every time using leading economic indicators requires using empirical study of particular indicators’ set