In a saucepan, combine the cod, milk, thyme, bay leaf and garlic. Add enough water to cover the fish and bring to a boil. Let simmer for 20 minutes, or until flaky and tender. Transfer the fish to a plate. Reserve the milk in the saucepan!
Add the potatoes to the saucepan and simmer until tender, about 10-15 minutes. Flake the fish with a fork. Transfer the potatoes to a bowl and mash to a coarse puree. Add 1-2 tablespoons of cooking liquid as needed. Flake the fish with a fork and add to the potatoes together with the chili, cilantro and egg yolk. Heat the olive oil in a skillet and fry the onion and garlic until softened, about 3-4 minutes. Stir through the potato mixture and season to taste. Refrigerate the mixture until cool and set, at least 30 minutes.
Take 3 small bowls, 1 for the flour, 1 for the eggs and 1 for the panko. Beat the eggs with a fork. Form the salt cod mixture into tablespoon-size balls. One by one, dredge each ball in flour, dip them in the beaten eggs and coat with panko. Arrange the balls on a baking sheet and refrigerate until chilled, about 10 -15 minutes.
Meanwhile, heat the oil to 375F/180C. Working in batches fry the balls until golden, about 4-5 minutes. Serve immediately with lime wedges, crispy parsley and lime mayo.
* To make the crispy parsley, fry the leaves of a bunch of curly parsley in the hot oil for 30 seconds. Drain on paper towel. Be careful when adding the leaves to the oil; it will spatter because of the moisture in the leaves.