Worth the hype? The effect of G20 summits on global financial markets

•This paper analyses the impact of the G20 meetings at both Ministerial and Leaders level on global financial markets.•We look at the timing of the G20 meetings and at other characteristics such as the press reaction to G20 meetings.•Effects of G20 summits are small, short-lived, non-systematic and non-robust across specifications and assets.•There is some evidence, though not very remarkable, that G20 summits have had a mild calming impact on market developments.

In the wake of the global financial crisis, the G20 has become the most important forum of global governance and cooperation, largely replacing the once powerful G7. Against this background, this paper looks at G20 meetings at Ministerial and Leaders level to see whether they had an impact on global financial markets. To assess their impact we run an event study and we look at equity returns, bond yields and measures of market risk such as implied volatility, skewness and kurtosis between 2007 and 2013. Our main finding is that G20 summits have not had a strong, consistent and durable effect on any of the markets that we consider, suggesting that the information and decision content of G20 summits is of limited relevance for market participants.