The popularity of remote work in the United States has emptied office buildings, a cause for worry as their value falls and owners risk losses on property loans – in turn putting pressure on smaller banks.

“There will be bank failures, but this is not the big banks,” said Federal Reserve Chair Jerome Powell on Thursday.

In San Francisco, Washington and even New York, offices have been seeing half the number of people as before the pandemic, with white-collar workers reluctant to return to commuting.

Office vacancy rates across the country have risen to 13.5 percent in 2023 from 9.5 percent in 2019, and could hit 16.6 percent at the end of next year, said credit company Fitch Ratings in a December report.