  We describe how the Harry Dym equation fits into the the bi-Hamiltonian
formalism for the Korteweg-de Vries equation and other soliton equations. This
is achieved by means of a certain Poisson pencil constructed from two
compatible Poisson structures. We obtain an analogue of the
Kadomtsev-Petviashivili hierarchy whose reduction leads to the Harry Dym
hierarchy. We call such system the HD-KP hierarchy. Then, we construct an
infinite system of ordinary differential equations (in infinitely many
variables) that is equivalent to the HD-KP hierarchy. Its role is analogous to
the one played by the Central System for the Kadomtsev-Petviashivili hierarchy.
