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hi there
The bmw range with discs fitted at the rear is notorious for squeaks from the handbrake shoes that run inside the discs.
Most E34 will produce a squeak from the handbrake shoes if you rock the car with handbrake on, if the squeak you hear when going in reverse is the same, then the problem could be the handbrake adjusted too tight.
On other hand it could be you pads squealing in reverse, which would requiere removing the all the pads, cleaning them with emery paper and chanfering the edges.
Hope this helps
Regards
Joe Rubido
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