Hi, Guys, Just curious. If people have a link exchange with a site which has been banned, then will google say no with the traffic from that banned site?
Why was the site banned? You are taking a huge chance by linking to the site if it's deemed a "bad neighbourhood". In Google's eyes you can't control which sites link to you, but you can control to who you link. As for the traffic... it might or might not raise red flags from Google depending on why the site was banned. I'd say it would be a bit risky linking and exchanging traffic with a site that was banned. If this was due to click-fraud from Adsense, those users are conditioned to click on Adsense ads, so it might cause you to be banned as well.
I don't think it matters, although if he links to you and you link back to him, and that site has been penalized by the Google SE, you may be penalized as well. Or are you talking more from an Adsense perspective, since you're posting this in the Adsense thread?