A generic optimization design approach of biorthogonal wavelet filter banks (BWFB) for extending the JPEG 2000 standard part-2 is presented in this paper. This approach adopts Vaidyanathan optimal coding gain criterion to design the BWFB, and adopts peak signal-to-noise ratio (PSNR) as the criterion to optimize this BWFB. A functional relation between the general BWFB and their lifting scheme is derived in the first place with respect to one free variable, so that the optimization design of the BWFB is easier and more convenient. In addition, a general image model is formulated as a first-order Markov process driven by Gaussian white noise. It is taken as an input of two-channel filter banks which satisfy perfect reconstruction (PR) condition to realize subband coding for obtaining the optimal BWFB according to the Vaidyanathan optimal coding gain criterion. Finally, a new 9/7 BWFB with rational coefficients is proposed for extending the JPEG 2000 standard part-2, with PSNR of reconstructed images only 0.20 dB lower than standard CDF 9/7 BWFB for infrared thermal image compressions.